The wages data represents the fastest growth recorded since January 2009. Unemployment held steady at 5.5%.
The news has sent sterling upwards, and this in turn is serving to keep inflation in check, meaning an earlier than expected interest rate rise is seen as unlikely.
“The increase in wage growth will be toasted by consumers who will have felt the benefits of more cash in their pockets in August,” said Nick Dixon, investment director at Aegon UK.
“This is a welcome pat on the back for long-term savers, who may opt to pay a larger proportion of their salary into their pension,” Dixon said. “Looking ahead, the current bull-run of sterling is putting the brakes on inflation, and combined with yesterday’s CPI figures, should put the possibility of a rate rise on hold for now.”
Should the positive data keep coming however, the first Bank of England rate rise since the crisis could come very early in 2016, according to some.
Bank of America Merrill Lynch’s research team said recent data wobbles have cast doubt on the UK’s recovery, but today’s labour market figures offer ‘some antidote.’
While investors should not ‘over-interpret one month’s data’ the resuming jobs growth, an unemployment decline and better wage gains fit with its view that the BoE will raise rates in February.
