British regular pay grows faster than inflation

Annual growth in regular pay (excluding bonuses) was 7.8% between June and August 2023, meaning it rose faster than average inflation – for the first time since October 2021.

UK inflation was 6.7% for the year to August and remained unchanged in September, according to ONS figures published today ( 18^th October).

Average annual public sector pay grew by 6.8% between June and August, while private sector pay grew by 8%.

There was a fall in food inflation to 12.1%, according to a separate release from the ONS today, with food and non-alcoholic drink prices falling by 0.2% between August and September.

Helen Dickinson, chief executive of the British Retail Consortium, said: “While headline inflation remained at 6.7% inflation rates in retail, such as food, furniture and clothing, all eased. This reflects the fierce competition between retailers, their investment in cutting costs, and the fall in the price of some global commodities.

“These factors helped shoppers welcome the first fall in food prices in two years, as September prices dropped below those in August. Some of the biggest price cuts were seen on items such as cheese, margarine, pasta and chocolate.”

In data published elsewhere, till sales at UK supermarkets grew by 9.1% in the four weeks ending 7^th October, according to NIQ’s most recent Total Till figures.

Volume sales also continued to improve with a decline of -0.4%. In-store sales increased (+8.1%) but were behind online (+10.8%).

Mike Watkins, UK head of retailer and business insight, NIQ, said: “There has been an improvement in volumes purchased over the last four weeks. This is a reflection that this time last year the pressure was growing on household incomes as inflation was accelerating in fuel, energy, and food. But it may also be an indication that some shoppers are now feeling more confident about their personal finances.