Real wages in Britain have risen for the sixth consecutive quarter, with average earnings growth of 5.1 per cent outstripping inflation of 1.8 per cent, according to the latest data from the Office for National Statistics.
The sustained period of real wage growth — the longest since 2015 — is beginning to repair the damage inflicted by the cost-of-living crisis, which saw household purchasing power decline by a cumulative 8 per cent between 2021 and 2024.
"Workers are finally getting ahead of the curve," said the chief economist at the Resolution Foundation. "But it's important to remember that we are still making up ground lost during the worst inflationary episode in a generation."
The data revealed significant sectoral variation, with technology and financial services leading with 7.2 per cent growth, while retail and hospitality lagged at 3.4 per cent. The public sector recorded 4.8 per cent growth following the government's above-inflation pay settlement.
The Bank of England is monitoring the data closely, with some Monetary Policy Committee members cautioning that sustained wage growth above 4 per cent could reignite inflationary pressures and delay anticipated interest rate cuts.
