Wage growth hits new record high

According to new figures from the Office for National Statistics (ONS), Brits wages grew much more than was expected in the three months to June.

In April to June, annual growth in regular pay – excluding bonuses – was 7.8%. This is the highest regular annual growth rate since records began in 2001 and pushed pay above price growth for the first time in more than a year.

These figures are likely to be a concern to the Bank of England (BoE) which needs to bring inflation down to 2% and could pile more pressure on homeowners with further interest rate rises needed to cool growth.

Experts believe that interest rates could hit 6% by early 2024 – up 0.75% from their current level of 5.25%.

However, the labour market may be showing some signs of cooling.

The number of people in employment fell by 66,000, with experimental payroll data from the tax office – which is more timely than the ONS figures – showing companies pulling back in pay growth in July.