Wage growth rises again ahead of tax hike in WEEKS – what it means for your money

AVERAGE earnings in the UK have grown by 3.2% when inflation is taken into account, new data shows.

Weekly earnings, excluding bonuses, rose by 5.9% between November 2024 and January 2025, compared with the same period a year earlier.

But when inflation is taken into account, wages actually rose by 3.2%.

That’s according to Office for National Statistics (ONS) figures.

It follows a rise in inflation in January which was well above the Bank of England’s target.

Prices in the UK rose by 3% in the 12 months to January – above the target of 2%.

If wages don’t keep up with rising prices, it means people are worse off in real terms.

Commenting on today’s figures, ONS director of economic statistics Liz McKeown said: “Overall pay growth remains relatively strong, with pay growth high in both the public and private sectors, despite the latter slowing slightly in the latest period.”

Meanwhile, the rate of unemployment remained unchanged at 4.4% in the three months to January.

However, this is above estimates of a year ago.

Ms McKeown added: “The wider labour market picture is relatively unchanged, with the number of employees on payroll broadly flat in the latest period and with little growth seen over much of the last year.

“Unemployment, as measured by the Labour Force Survey, and the Claimant Count have both increased slightly in the latest periods, though caution continues to be advised with the survey estimates.

“Initial estimates show that the number of vacancies is little changed on the previous quarter, remaining just above pre-pandemic levels.”