This weeks see a news report based on data from the Office of National Statistics (ONS) that pay growth has overtaken inflation for the first time in five years.

Wages rose by 1.3% in the year to September according to the ONS.

At the same time unemployment has fallen for the 18th consecutive quarter.

The Government of course highlight that these are promising signs of recovery while others are more cautious…

A UK economist reminds us that these figures are more to do with low inflation than particularly increased earnings. Meanwhile the drop in unemployment figures can be partly explained by a higher number of people not claiming jobseekers allowance but being in part time work when they would prefer to be in full time employment. An increase in the number of self employed people may also account for some of the decrease in unemployment figures.

So whilst this story is not bad news by any means, we also read it in the context that, in real terms, take home pay is estimated to still be 13% below where it was before the recession.

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