Key facts
- Private sector wage growth in the UK eased to 3.6% between September and November.
- This is the lowest rate of private sector pay growth recorded in five years.
- Public sector wage growth was significantly higher at 7.9%.
- The number of people on company payrolls decreased by 135,000 year-on-year.
- The unemployment rate stood at 5.1%, its highest level since early 2021.
Private sector wage growth in the UK has slowed to its lowest rate in five years, falling to 3.6% between September and November, according to official figures. This easing of pay growth is viewed positively by economists like Sanjay Raja of Deutsche Bank, who stated that it is 'really encouraging' for the Bank of England's efforts to control inflation and bring it back to the 2% target.
In contrast, public sector workers saw their wages increase by 7.9%, a rise attributed by the Office for National Statistics (ONS) to pay awards being granted earlier than in the previous year. The ONS also reported a decline in the number of people on company payrolls, down by 135,000 year-on-year, with notable decreases in the retail and hospitality sectors, despite the approach of the Christmas season.
The unemployment rate remained at 5.1% during the September to November period, the highest it has been since early 2021. Yael Selfin, chief economist at KPMG UK, anticipates that the unemployment rate may rise further in the coming months, citing employers' intentions to reduce hiring due to increased employment costs, including a rise in National Insurance contributions for employers and an increase in the minimum wage.