The UK’s economy is outperforming those of countries which are members of the eurozone – with Brexit a factor, a UK-based expert has said.
And, citing figures from Eurostat, the European Union’s own statistics division, Julian Jessop pointed to wages which were rising faster than those in the 19 countries signed up for the single European currency.
Posting on X, Mr Jessop, Economics Fellow at the Institute for Economic Affairs, pointed to figures indicating hourly wages and salaries increased by 4.5 percent in the #euro area in Q2 compared to a year earlier – about two percent above the average price inflation of 2.5 percent over this period.
However, he pointed out that, while not exactly comparable, UK average weekly regular earnings rose by 5.4 percent in Q2, 3.2 percent above CPI inflation.
He told Express.co.uk: “One reason why the British economy has outperformed the euro area so far this year is that real wages (after allowing for inflation) are rising more quickly in the UK.
“This has helped to underpin a stronger recovery in consumer spending.
He explained: “This mainly reflects a relatively tight labour market and shortages of workers, which in turn is due to a wide range of factors including increased long-term sickness, more people retiring early, and Brexit.
“The fact that employers can no longer rely on cheap labour from the EU is clearly having some beneficial impact on the wages of UK workers, even taking account of the adverse effects on costs and prices.
“Overall, this is good news for people in work, but sends mixed signals about the underlying health of the economy.”
Average wage increases in Germany, the bloc’s economic powerhouse, were slightly higher than the eurozone average, at 4.7 percent in Q2.
However, in France, the other major economy, they are lagging well behind, on 3.4 percent.
Figures published by the Office for National Statistics for August 2024 indicate that the annual growth for regular earnings (excluding bonuses) was 5.4 percent from April to June 2024.
Growth was last lower than this in May to July 2022, when it was 5.2 percent.
Annual growth in employees’ average total earnings (including bonuses) was 4.5 percent.
However, this total pay annual growth rate is affected by the NHS one-off bonus payments made in June 2023, causing what is known as a “base effect”.