Average weekly earnings in Great Britain: September 2024

Other commentary from the latest labour market data can be found on these pages:

• Labour market overview, UK
• Earnings and employment from Pay As You Earn Real Time Information, UK
• Employment in the UK
• Vacancies and jobs in the UK

The following information is for the period from May to July 2024.

• Annual growth in employees’ average regular earnings (excluding bonuses) was 5.1%; growth was last lower than this in April to June 2022, when it was 4.7%.
• Annual growth in total earnings (including bonuses) was 4.0%; this total growth rate is affected by the NHS and civil service one-off payments made in June and July 2023.
• Annual growth in real terms (adjusted for inflation using the Consumer Prices Index including owner occupiers’ housing costs (CPIH)) was 2.2% for regular pay and 1.1% for total pay.
• Annual average regular earnings growth for the public sector remains strong at 5.7%, although down on the previous three-month period (6.0%); for the private sector this was 4.9%, with growth last lower than this in February to April 2022 (4.8%).
• The manufacturing sector saw the largest annual regular growth rate at 5.9%, while the construction sector saw the smallest annual regular growth rate at 3.9%.

Average weekly earnings (AWE) were estimated at £689 for total earnings and £647 for regular earnings in July 2024. Figure 1 shows that AWE have steadily increased over the long term.

The annual growth for regular earnings (excluding bonuses) was 5.1% in May to July 2024. Growth was last lower than this in April to June 2022, when it was 4.7%.

Annual growth in employees’ average total earnings (including bonuses) was 4.0%. However, this total pay annual growth rate is affected by the NHS and civil service one-off non-consolidated payments made in June and July 2023, causing a base effect. See the Sector and industry section for further details. There is also a similar pattern in the HM Revenue and Customs (HMRC) data in the Earnings and employment from Pay As You Earn Real Time Information, UK bulletin.

In real terms (adjusted for inflation using the Consumer Prices Index including owner occupiers’ housing costs (CPIH)), real regular pay growth on the year was 2.2% in May to July 2024, down on the previous three-month period, when it was 2.4%. Total real pay rose by 1.1% on the year in May to July 2024; again this is affected by the NHS and civil service one-off non-consolidated payments made in June and July 2023.

As inflation has reduced over the last six months, real growth rates have increased on the year. Figure 3 shows a comparison of monthly real total and regular pay growth rates and monthly inflation. For May to July 2024, CPIH was an average of 2.9%.

Our headline measure of inflation is CPIH. However, we also publish our supplementary X09: Real average weekly earnings using consumer price inflation (CPI) dataset, excluding owner occupiers’ housing costs. Using CPI real earnings, regular real pay rose by 3.0% on the year, lower than the previous three-month period when it was 3.2%. Total real pay rose by 1.9% on the year in May to July 2024.

The Earnings and employment from Pay As You Earn Real Time Information, UK bulletin provides additional insights into the estimate of growth in median and mean pay, and the two data sources generally trend well for mean total pay. A timelier estimate of median pay is also provided but is subject to revisions.

However, there will be differences between the two data sources because of timing and definitional differences, as described in our Comparison of labour market data sources methodology.

Sector and industry

Annual average regular earnings growth for the public sector remains strong at 5.7% in May to July 2024, although down on the previous three-month period (6.0%) (Figure 4). For the private sector, this was 4.9%, and growth was last lower in February to April 2022 (4.8%).

Annual average total earnings growth for the public sector was 0.8% in May to July 2024. However, this is affected by the NHS and civil service one-off non-consolidated payments made in June and July 2023. Looking at the single-month annual growth for the public sector in July and June 2024, we saw small growth or decreases on the year.

For July 2024, the annual total earnings growth for the public sector was 2.4%. This was because of the public administration industry, which saw a decrease on the year of 6.1%. For June 2024, the annual total earnings growth for the public sector saw a decrease on the year of 5.7%. This was because of the health and social work industry, which saw a decrease on the year of 11.7%.

For the private sector, annual average total earnings growth was 4.8% in May to July 2024. Growth was last lower in September to November 2021, when it was 4.6%.

In May to July 2024, the manufacturing sector saw the largest annual regular pay growth at 5.9% (Figure 5). The construction sector saw the smallest annual regular pay growth across sectors at 3.9%, however, this was an increase from the previous three-month period (3.5%). In May to July 2024, the manufacturing sector also saw the largest annual total pay growth at 6.2%.

Arrears payment

Pay award arrears are collected separately on the questionnaire; this specifically covers earnings arising from a backdated pay increase, not late payment of overtime or bonuses. Arrears payments are reflected in estimates at the time they were paid, and not in the period they are awarded for. Therefore, backseries are not revised. Our Average weekly earnings (AWE) headline estimates exclude arrears payments.

Bonus

A bonus is a form of reward or recognition granted by an employer in addition to basic pay. When an employee receives a bonus payment, there is no expectation or assumption that the bonus will be used to cover any specific expense. The value and timing of a bonus payment can be at the discretion of the employer or stipulated in workplace agreements.

Consumer Prices Index including owner occupiers’ housing costs

As of 21 March 2017, the Consumer Prices Index including owner occupiers’ housing costs (CPIH), as detailed in our Consumer Price Inflation quality and methodology information (QMI), became our lead measure of inflation. It is our most comprehensive measure of UK consumer price inflation.

Revisions

AWE are generally published on a provisional basis around six to seven weeks after the end of the month in question, although sometimes a week later in the months following Christmas and Easter. The unadjusted estimates are finalised the following month (10 to 11 weeks after the end of the reference period). Seasonally adjusted estimates are subject to further revisions at later dates.

A more detailed glossary is available.

Data sources

Average Weekly Earnings (AWE) is the lead monthly measure of average weekly earnings per employee, as explained in Section 2: Earnings of our Guide to labour market statistics methodology. It is calculated using information based on the Monthly Wages and Salaries Survey (MWSS), which samples around 9,000 employers, covering around 12.8 million employees in Great Britain.

The survey response rate was 83% in July 2024.

Estimates are available for both total pay (which includes bonus payments) and regular pay (which excludes bonus payments). Estimates are available in both nominal terms (not adjusted for inflation) and real terms (adjusted for inflation).

Estimates of pay growth are also published using HM Revenue and Customs (HMRC) data in the Earnings and employment from Pay As You Earn Real Time Information, UK bulletin. The HMRC estimates are presented in median pay terms, but they also include mean pay, as does AWE. There are some differences between the sources, most notably that the HMRC estimates include arrears payments and any redundancy payments that are made through payroll. Further detail is provided in our Comparison of labour market data sources methodology.

Data methods

AWE for any given month is the ratio of estimated total pay for the whole economy, divided by the total number of employees. As a result, AWE is not a measure of rates of pay and can be affected by changes in the composition of an enterprise’s workforce. They do not, for example, adjust for changes in the proportion of the workforce who work full time or part time, or other compositional changes within the workforce. The estimates do not include earnings of self-employed people.

Composition of the workforce

The AWE reflects changes to the composition of the workforce. In AWE, all other things being equal, an increase in the relative number of employees in a high-paying industry will cause average earnings to rise. This is because the mix of jobs would have changed so that there are more high-paying jobs. Conversely, an increase in the relative number of employees in low-paying industries would cause average earnings to fall.

This effect is sometimes called the employment contribution to earnings growth, as opposed to the wages contribution, which reflects changes in earnings at individual companies, such as pay rises, promotions and changes in the composition of individual company workforces. In addition to AWE growth, we publish separate estimates of the wage and employment contributions to AWE growth in supplementary tables called the AWE decomposition.

Base and compositional effects during the coronavirus (COVID-19) pandemic period

During the pandemic period, interpreting average earnings data was difficult. We explain the complexities of interpreting these data in our How COVID-19 has impacted the Average Weekly Earnings data blog post. There were temporary factors that we refer to as base and compositional effects.

The base effect refers to comparing two periods with different circumstances. Throughout the pandemic, different scenarios have affected the base effect. More information on base and compositional effects on the data can be found in our Average weekly earnings in Great Britain: May 2022 bulletin and Section 6: Measuring the data of our Average weekly earnings in Great Britain: July 2024 bulletin.

For additional analysis on the impact of compositional effects on wage growth, see our How furlough and changes in the employee workforce have affected earnings growth during the coronavirus (COVID-19) pandemic, UK: 2020 to 2021 article.

Real earnings

Real average weekly earnings (AWE) are calculated as non-seasonally adjusted AWE (shown in our accompanying EARN02: Average weekly earnings by sector dataset) divided by the Consumer Prices Index including owner occupiers’ housing costs (CPIH), which is our preferred measure of consumer price inflation (as shown in our CPIH Index time series L522). The ratio is then referenced as an index with 2015 equals 100, and seasonally adjusted.

We also publish our accompanying X09: Real average weekly earnings using consumer price inflation (CPI) dataset for the whole economy and for both total and regular pay. Our recommended measure of CPI is CPIH, and our headline estimates using this measure are found in our accompanying EARN01: Average weekly earnings dataset. These data have been compiled using the CPI as a supplementary dataset to view alongside the headline estimates produced using the CPIH.

Seasonal adjustment

Total pay, bonus pay and regular pay (excluding bonuses) for each sector (a total of 27 series) are seasonally adjusted using X13-ARIMA. Percentage changes are then derived from the seasonally adjusted average pay series.

Each of the 27 series is seasonally adjusted separately, to ensure the optimum seasonal adjustment of each series. The result of this is that relationships that hold in the unadjusted series do not necessarily hold for the seasonally adjusted series. For example, before seasonal adjustment, regular pay plus bonus pay equalled total pay, whereas after seasonal adjustment, they are not necessarily equal.

When there is an exceptionally large change in the series, this can lead to larger differences between regular pay plus bonus pay, and total pay. We saw this in March 2021 and 2020, when the bonus payments pattern changed during the pandemic. Consequently, the direct seasonal adjustment method, which allows for evolving seasonality, caused a larger than normal difference. This is supported by other similar instances, such as in January and February 2009.

Where one-off shocks are present in the data, these are accounted for during the seasonal adjustment process. This was applied in June 2023 to the public sector bonus payments.

In line with international guidance, we annually review the seasonal adjustment parameters and open up the whole time series for revision, as outlined in our Average weekly earnings quality and methodology information (QMI). This was last reviewed in September 2023 and led to revisions to the historical AWE time series, extending back throughout the time series.

Seasonal adjustment upcoming changes

The seasonal adjustment parameters used to calculate average weekly earnings estimates will be reviewed before the next UK labour market release (15 October 2024). This is an annual process, as outlined in our Average weekly earnings QMI. The review may lead to revisions to the historical AWE time series, extending back throughout the entire time series.

Uncertainty

Sampling variability for average weekly earnings single-month growth rates in percentage points is also available in our Average weekly earnings in Great Britain: April 2021 bulletin.

More quality and methodology information

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in our Average weekly earnings Quality and Methodology Information.

For more information about some of the main differences between our data sources, see our Comparison of labour market data sources methodology.

Information on the strengths and limitations of this bulletin is available in:

• our Average weekly earnings in Great Britain: April 2021 bulletin
• our Guide to labour market statistics methodology
• our Income and earnings statistics guide methodology
• the Government Statistical Service Income and earnings interactive dashboard

Accredited official statistics

These accredited official statistics were independently reviewed by the Office for Statistics Regulation in December 2014. They comply with the standards of trustworthiness, quality and value in the Code of Practice for Statistics and should be labelled “accredited official statistics”.