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The
6.5% rise in advertised starting pay compared with a year
earlier outstrips the 6.0% rise in official wage data for the
three months to April. That was the joint smallest increase
since September 2022, although still twice the rate the Bank of
England views as consistent with low inflation.
Uncertainty about whether pay growth is slowing materially
remains a key factor behind the BoE's reluctance to cut interest
rates from the current 16-year high, despite the return of
headline inflation to its 2% target last month.
But past double-digit inflation means rising wages have not yet
translated into an economic feel-good factor, adding to Prime
Minister Rishi Sunak's bleak prospects in next week's election.
Some economists worry that the large number of people who have
dropped out of Britain's job market since the COVID-19 pandemic
is storing up inflation problems for the long term.
However, the Indeed data showed the number of unfilled jobs -
often seen as an indicator of future wage and inflation
pressures - is 0.9% below its level just before the COVID-19
outbreak, after falling by a fifth in the past year.
"The UK labor market has continued its adjustment in recent
months, though it remains somewhat tight and still competitive
for employers in many sectors," said Jack Kennedy, senior
economist at Indeed.
The biggest pay rises occurred in typically low-paid sectors
such as childcare, cleaning, security work, retail and
hospitality, where many workers benefited from a nearly 10% rise
in the minimum wage in April.
The pandemic and post-Brexit changes to immigration policy had
also increased hiring difficulties for low-paid roles, Indeed
said.
The biggest labor shortages, based on the length of time jobs
were advertised for, were for veterinary, engineering, aviation
and software roles.
(Reporting by David Milliken; Editing by Paul Simao)
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