Pay continues to grow in UK but faces pressure

Average UK pay rose by 5.9%, official data suggests, while vacancies fell to their lowest since before Covid.

Wage growth is slightly ahead of the previous period and was lifted by the public sector, according to Liz McKeown, director of economic statistics at the Office for National Statistics which published the figures.

But some economists warned that salaries will come under pressure after increases to the amount of National Insurance employers pay came into force this month at the same time as rises to the National Minimum Wage.

Meanwhile, the number of jobs on offer dropped to 781,000 in the first three months of the year, falling below pre-pandemic levels in 2020.

Yael Selfin, chief economist at KPMG UK, said: “The short-term impact of the rise in labour costs which came into effect in April, will likely put downward pressure on pay over the coming months.”

The ONS said the UK unemployment rate remained at 4.4%, roughly the same as the previous three months.

The employment rate for people aged 16 to 64 years was 75.1%, still below Labour’s target of 80% employment.

The ONS said its jobs figures should be treated with caution because of low response rates to its employment survey, on which the figures are based.