Wage growth rises above inflation for first time in two years

Wages, excluding bonuses, rose at an annual rate of 7.8% between June and August – with this being higher than the average inflation rate over the same three months, meaning wages are outpacing prices for the first time since October 2021.  

The annual growth in employees’ average total pay – including bonuses – meanwhile hit 8.1% in June to August 2023, with this total growth rated being affected by the NHS and civil service one-off payments made in June, July and August 2023.  

Broken down by sector, those working in the public sector saw their annual average regular pay grow by 6.8% between June and August – making this the highest regular annual growth rate since comparable records began in 2001. In the private sector, meanwhile, this growth was at eight percent – making this among the largest annual growth rates seen outside the Covid period.

Of the industries driving this growth, those operating in the finance and business services sector saw the largest annual regular growth rate increase – going up by 9.6% – followed by the manufacturing sector at eight percent, with this being one of the highest annual growth rates for the manufacturing sector since comparable records began in 2001.