Median monthly pay for July 2023 has been estimated at £2,274, a 7.8% increase from July 2022 and the highest rate since 2001, according to data from the Office for National Statistics (ONS).
Its latest labour market figures revealed that this was a decrease from £2,308 in June 2023, which was a 9.7% year-on-year increase from June 2022. It was also a 22.3% increase from February 2020.
Annual median pay growth for employees in July was highest in the public administration sector, with an increase of 14%, and lowest in the accommodation and food service activities sector, with an increase of 5.6%. The public administration sector growth reflects a one-off cost-of-living payment that was awarded, worth up to £1,500.
The economic inactivity rate decreased by 0.1 percentage points to 20.9% in April to June. The decrease during the latest quarter was largely driven by inactive people looking after a family or a home. Meanwhile, those who were inactive because of long-term sickness increased to a record high.
Darren Morgan, director of economic statistics at ONS, said: “The number of people prevented from working by long-term sickness has risen again to a new record. Earnings continue to grow in cash terms, with basic pay growing at its fastest since current records began. Coupled with lower inflation, this means the position on people’s real pay is recovering and now looks a bit better than a few months back.”
Greg Marsh, chief executive officer of Nous.co, added: “Wage increases may bring some short-term relief for workers. However in the long run, there’s a risk high pay growth contributes to making high inflation more persistent. At the same time, many businesses are seriously struggling to keep up with pay demands. Offering strong workplace benefits that genuinely help employees with their finances can make a huge difference to people’s lives, and how they feel about their employer too. Non-salary perks are a cost-effective way of attracting and retaining talent.”