George Osborne is calling Wednesday’s wage growth figures a “major moment” in the UK’s economic recovery and it’s not hard to see why. With the general election less than five months away, the government is keen to generate a feelgood factor to close Labour’s small lead in the polls. There are a number of reasons why the chancellor has cause for some optimism.
The first piece of good news for ministers is that average earnings are now definitely rising. Pay excluding bonuses in the three months to October were 1.6% higher than in the same three months a year earlier. In October alone, it was 1.8% higher. This is still modest by the standards of yesteryear – earnings tended to grow by at least 4% a year before the financial crisis – but the trend is upwards.
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