British employers have been on a tear recently. Figures out Wednesday morning show that businesses hired more than 750,000 people in the last year.
In the 12 months to July, the number of employed people in the UK increased by 774,000 from 29.8 million this time last year. The rate is up to 73%, from 71.6%, and unemployment is down from 7.7% to 6.2%
These employment levels are pretty astounding. According to the Office for National Statistics, the employment rate hasn’t climbed above 73.1% in at least 43 years. Another 0.2 percentage point boost would put the share of people working at the highest level in generations.
But it’s not all good news. Earnings including bonuses only rose 0.6% in the same 12-month period. Though that’s out of the negative territory it has been in previous months, it’s still way below inflation.
The dismal recent wage growth is one of the last things holding back policymakers from hiking interest rates: The Bank of England announced another 7-2 split on the monetary policy committee. Resident hawks Martin Weale and Ian McCafferty seem to have voted for a 0.25 point hike again, but haven’t carried any other members with them.
Most analysts seem happy enough with holding interest rates for now, with unemployment at 1.5%, but some aren’t as happy.
“Further delay in the first rate hike could lead to a situation of faster and larger interest rate increases later which would be more disruptive for markets,” JP Morgan Asset Management global market strategist Kerry Craig said in a note.
“Remember that the Bank of England sets monetary policy not for what inflation is now, but what it will be in two years time.”