Rishi Sunak Welcomes Record Wage Growth and Predicted Fall in Inflation
Rishi Sunak, the UK Prime Minister, remains confident in his economic plan as wage growth reaches a record high and inflation is expected to decrease. Despite the pressure on the Bank of England to raise interest rates, Sunak is determined to "stick to the plan."
Record-breaking Salary Rises and Decrease in Inflation
According to the latest figures, salary increases reached an unprecedented 7.8% in the three months leading up to June, rising to 8.2% when accounting for bonuses. Experts predict that inflation will fall to approximately 6.7% for July, down from the previous month's 7.9%.
Benefits for Hard-Working Brits
Prime Minister Sunak assures hard-working Brits that they will soon reap the rewards of rising salaries surpassing the rate of price increases. During his visit to Milton Keynes Hospital after returning from vacation, Sunak pledges to halve inflation by year-end and expresses optimism about the future.
Bank of England's Response and Government Warnings
Bank of England officials have already increased interest rates 14 consecutive times to 5.25%, and another hike is expected next month. Internally, the government warns of potential economic challenges, including higher wages and the rising cost of clothing during the summer.
Triple Lock Pension Payments
The Treasury may face additional expenses in pension payments due to the "triple lock" pledge, which guarantees an increase based on either average wage growth, inflation, or 2.5%. The annual pension rate rise is determined by the September inflation figure.
Unemployment Rates and Increase in Payrolled Employees
The unemployment rate rose to 4.2% in the three months leading up to June, representing a 0.3% increase. However, provisional data from the Office for National Statistics reveals that the number of payrolled employees in July rose by 97,000 to 30.2 million.
Economist's Perspective
Darren Morgan, an economist from the ONS, explains that earnings continue to grow in cash terms, with basic pay experiencing its fastest growth since current records began. Combined with lower inflation, this suggests that people's real pay is recovering and improving compared to previous months.
