Public sector wage growth jumps to 22-year high due to Jeremy Hunt

The chancellor is resisting pressure to give civil servants another massive payout. Photo: Thierry Monasset/Getty Images Europe

Public sector wage growth hit its highest level in 22 years, hitting the chancellor's ambition to curb inflation.

Average public sector wages rose by 5 .8% in the three months to May, according to the Office of Statistics (ONS), the fastest quarterly growth since 2001.

It comes as the chancellor resists pressure to give civil servants another massive payout as he fights to contain soaring inflation.

Jeremy Hunt said in a speech at the mansion on Monday night that the government needs to take » responsible decisions about public finances, including public sector wages, because an increase in borrowing itself leads to inflation.”

Rishi Sunak indicated that he was prepared to ignore recommendations for a 6.5% public sector wage hike, saying in recent weeks that workers «should be aware of the economic context we are in.»

Growth wages is one of the key measures, the Bank of England is watching for signs of entrenched inflation.

Governor Andrew Bailey warned on Monday evening that «rising prices and wages at current rates is not in line with the inflation target.»

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Mel Stride, Minister of Labor and Pensions, told the LBC that the government is taking a «robust and robust approach to calculating government benefits.»

ONS data showed private sector wages rose by 7% in the three months to May. .7%, the fastest pace on record outside of the pandemic.

Across the economy, average regular wages rose by a record 7.3%

Although growth is below current inflation rates at 8.7%, the data fuels fears that inflation is taking its toll on the economy through a wage-price spiral.

Divya Sridhar, an economist at PwC, warned that «strong wage growth will continue to fuel concerns about high inflation.»

Following the latest wage data, traders increased bets on another 0 interest rate hike. .5 percentage points on the next Bank of England monetary report. policy meeting.

Another sharp increase will raise the base rate to 5.5%, the highest level since late 2007.

The ONS Labor Market Report also showed that employment in the UK rose slightly. three months before May, reaching 76%. Unemployment rose 0.2 percentage points to 4%.

The economic inactivity index, which measures the number of people who are unemployed but not looking for work, fell 0.4 percentage points to 20.8%.

< p>In a sign that higher interest rates and economic uncertainty are beginning to take their toll on the job market, the number of vacancies fell to 1,034,000 for the 12th consecutive month.