Fresh data has shown that annual wage growth continued in June, 2024, in the UK, US and Euro area, with the figures for the UK dubbed “stand out” by Indeed Wage Tracker analysts.
The data from the tracker also suggests that wage growth in some regions is stabilising, and at higher rates than before the pandemic.
In June, 2024, wages grew at an annual rate of 7 percent in the UK, at 3.7 percent in the Euro area, and 3.1 percent in the US.
Wage growth levels
The figure for the UK was up slightly from 6.9 percent in May, with its new level of 7 percent in June edging it closer to the recent 2023 peak of 7.1 percent.
Euro area wage growth was also up slightly from 3.5 percent in March, April and May, to 3.7 percent, putting it above the pre-pandemic range of 2 percent to 2.5 percent.
Researchers from Indeed also estimated that in the Euro area, the annual growth in total compensation per employee was 5 percent in the second quarter of 2024, up from 4.9 percent in the first quarter. This is because total compensation includes one-off payments to account for past inflation, which are not included in advertised salaries.
Researchers also said that while this was still notably lower than the post-pandemic peak of 5.5 percent in 2023, it is a sign that aggregate wage growth is likely to remain high in the Euro area during 2024.
Market normalisation
In the US, the annual wage growth of 3.1 percent in June represented the third consecutive month at this level.
Researchers said that in the US, wage growth appears to have stabilised at pre-pandemic levels, calling it a welcome sign of labour market normalisation.
However, data for the Euro area and the UK indicated that wage growth in these regions could be stabilising at rates higher than pre-pandemic levels, they said.
Stand out wage growth
Pawel Adrjan, head of EMEA research at the Indeed Hiring Lab, said: “As pay pressure in the UK refuses to dissipate, the Indeed Wage Tracker shows an annual increase of 7 percent in the average posted wage, up from 6.9 percent in the prior month, which is only just below the 2023 peak of 7.1 percent . The UK’s high rate of wage growth stands out among the countries we track, second only to the Netherlands. While the Eurozone as a whole also experienced a recent uptick, most other European nations and the US remain some way off their respective peaks and closer to pre-pandemic levels. UK wage growth is among the most persistent globally.
“Strong wage growth across all pay ranges suggests that the UK’s national living wage increase of 9.8 percent on 1 April, 2024, isn’t the sole driver behind rising wage growth, but it is having a lasting impact on lower-paid salaries, alongside sector-specific labour demand. With Labour planning to scrap age-specific bands in the UK’s national minimum wage structure, lower-paid occupations may yet receive another boost.
“The tracker’s findings will do little to make the Bank of England feel comfortable enough to begin the interest rate’s descent from 5.25 percent . As the Monetary Policy Committee continues to weigh the timings of cuts, the chances of this being in August have dimmed.”
