Other commentary from the latest labour market data can be found on these pages:
Growth in employees’ average total pay (including bonuses) was 5.9% and growth in regular pay (excluding bonuses) was 6.6% in December 2022 to February 2023.
Growth in total and regular pay fell in real terms (adjusted for inflation) on the year in December 2022 to February 2023, by 3.0% for total pay and 2.3% for regular pay; a larger fall on the year for real total pay was last seen in February to April 2009 when it fell by 4.5%, but it still remains among the largest falls in growth since comparable records began in 2001.
Average regular pay growth for the private sector was 6.9% in December 2022 to February 2023, and 5.3% for the public sector; a larger growth for the public sector outside of the coronavirus (COVID-19) pandemic period was last seen in May to July 2005 (5.4%) and the difference between private and public sector growth rates has narrowed in recent months.
The finance and business services sector saw the largest regular growth rate at 8.3%, followed by the construction sector at 6.2%.
Average weekly earnings were estimated at £638 for total pay and £596 for regular pay in February 2023. Figure 1 shows that average weekly earnings have steadily increased, with the exception of the early months of the coronavirus (COVID-19) pandemic.
Growth in employees’ average total pay (including bonuses) was 5.9% and growth in regular pay (excluding bonuses) was 6.6% in December 2022 to February 2023. For regular pay this remains among the highest growth rates seen outside of the coronavirus (COVID-19) pandemic period.
In real terms (adjusted for inflation), in December 2022 to February 2023, total pay fell by 3.0% on the year. A larger fall was last seen in February to April 2009, when it fell by 4.5% on the year, but this still remains among the largest falls we have seen since comparable records began in 2001. Regular pay fell by 2.3% on the year.
The difference between nominal and real growth rates is because of an increasing Consumer Prices Index including owner occupiers' housing costs (CPIH). For the three months of December 2022 to February 2023, CPIH was an average of 9.1%. Figure 3 shows a comparison of monthly real total and regular pay growth rates and monthly inflation.
Our recommended measure of inflation is CPIH. However, we also publish our supplementary real earnings dataset using the Consumer Prices Index (CPI) excluding owner occupiers' housing costs. Using CPI real earnings, in December 2022 to February 2023, total pay fell by 4.1% on the year. A larger fall on the year was last seen in October to December 2022 when it fell by 4.3% and previous to this in February to April 2009 (4.5%). Regular pay fell by 3.4% on the year.
The Earnings and employment from Pay As You Earn Real Time Information, UK bulletin also 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 more timely estimate of median pay is also provided but is subject to revisions.
Sector and industry
Average regular pay growth was 6.9% for the private sector in December 2022 to February 2023, and 5.3% for the public sector (Figure 4). A larger growth for the public sector outside of the coronavirus (COVID-19) pandemic was last seen in May to July 2005 when it was 5.4%. The difference between private and public sector growth rates has narrowed in recent months.
In December 2022 to February 2023, the finance and business services sector saw the largest regular growth rate at 8.3%, followed by the construction sector at 6.2% (Figure 5). However, when looking at the sector’s growth for total pay, a different pattern is seen, with the finance and business services sector having the smallest sector growth rate at 4.9%. This is because the bonus payments made in December 2022 and January 2023 for this sector are smaller than the bonus payments made in December 2021 and January 2022, with the December 2021 bonus paid being higher than normal.
More about economy, business and jobs
Average weekly earnings
Dataset EARN01 | Released 18 April 2023
Headline estimates of earnings growth in Great Britain (seasonally adjusted).
Average weekly earnings by sector
Dataset EARN02 | Released 18 April 2023
Estimates of earnings in Great Britain broken down to show the effects of changes in wages and the effects of changes in the composition of employment (not seasonally adjusted).
Average weekly earnings by industry
Dataset EARN03 | Released 18 April 2023
Estimates of earnings in Great Britain broken down by detailed industrial sector (not seasonally adjusted).
X09: Real Average weekly earnings using Consumer price inflation
Dataset X09 | Released 18 April 2023
Average weekly earnings for the whole economy, for both total and regular pay, in real terms (adjusted for consumer price inflation).
Average Weekly Earnings (AWE)
As explained in our guide to labour market statistics methodology, Average Weekly Earnings (AWE) is the lead monthly measure of average weekly earnings per employee. It is calculated using information based on the Monthly Wages and Salaries Survey (MWSS), which samples around 9,000 employers in Great Britain.
The estimates are not just a measure of pay rises. 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.
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 any redundancy payments that are made through payroll. Further detail is provided in our Comparison of labour market data sources methodology.
A bonus is a form of reward or recognition granted by an employer. 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 methodology, became our lead measure of inflation. It is our most comprehensive measure of UK consumer price inflation.
Monthly Wages and Salaries Survey
The Monthly Wages and Salaries Survey (MWSS) is a survey through which we collect information on wages and salaries. It is distributed monthly to around 9,000 employers, covering around 12.8 million employees.
A more detailed glossary is available.Nôl i'r tabl cynnwys
This section provides more detail around the methodology of the survey. Further information on this is available in our Average weekly earnings quality and methodology information (QMI).
The survey response rate was 83%, so now back to the level seen in the months before the coronavirus (COVID-19) pandemic.
The real Average Weekly Earnings (AWE) is calculated as the non-seasonally adjusted AWE (shown in our accompanying dataset EARN02) 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 a dataset on real average weekly earnings, using Consumer Price Inflation (CPI) for the whole economy, for both total and regular pay (X09). Our recommended measure of consumer price inflation is CPIH, and our headline estimates using this measure are found in our accompanying dataset EARN01. These data have been compiled using the CPI as a supplementary dataset to view alongside the headline estimates produced using the CPIH.
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. The AWE headline estimates exclude arrears payments.
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 2022, when there were very large bonus payments. 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 February 2007 and February 2008.
Interpreting average earnings - base and compositional effects
Interpreting average earnings data over the last year has been difficult. Our How COVID-19 has impacted the Average Weekly Earnings data blog post explains the complexities of interpreting these data. 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 coronavirus (COVID-19) pandemic, different scenarios have affected the base effect. More information on base effects can be found in our Average weekly earnings in Great Britain: May 2022 bulletin.
The compositional effect means pay growth has been affected by a changing composition of employee jobs, which during the coronavirus pandemic had increased average pay. The latest data show that the composition effect is now at more normal levels, and we are no longer seeing the excessive levels we saw during periods of the coronavirus pandemic in 2020 and 2021. Our How furlough and changes in the employee workforce have affected earnings growth during the coronavirus (COVID-19) pandemic, UK: 2020 to 2021 article looks in more detail at the impact of compositional effects on wage growth.
Following the initial impact of the coronavirus pandemic, the change in pay growth was heavily affected by a changing composition of employee jobs, where we saw a fall in the number and proportion of lower-paid employee jobs. This changing composition naturally increased average pay and should be kept in mind when interpreting average pay growth. Changes in the profile of employee jobs in the economy will affect average pay growth. A decrease in employee numbers in jobs that have lower pay can have an upward effect on average pay, and the other way around.
More information on the compositional effect on the data is available in the Measuring the data section of the Earnings and employment from Pay As You Earn Real Time Information, UK: May 2022 bulletin.
Sampling variability for average weekly earnings single-month growth rates in percentage points is also available in the April 2022 edition of this bulletin.
Our Comparison of labour market data sources methodology discusses some of the main differences between our data sources.
More information on measuring the data is available in our Average weekly earnings in Great Britain: April 2021 bulletin.
Making our published spreadsheets accessible
Following the Government Statistical Service (GSS) guidance on releasing statistics in spreadsheets, we will be amending our published tables over the coming months to improve usability, accessibility and machine readability of our published statistics. To help users change to the new formats, we will be publishing sample versions of a selection of our tables. Where practical, we will initially publish the tables in both the new and current formats. If you have any questions or comments, please email firstname.lastname@example.org.Nôl i'r tabl cynnwys
Information on the strengths and limitations of this bulletin is available in:
Office for National Statistics (ONS), released 18 April 2023, ONS website, statistical bulletin, Average weekly earnings in Great Britain: April 2023
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