VocaLink’s take home pay index increased for the first time in three months, to 3.5% in November from 3.4% in October. Wage growth is typically quite resilient in a downturn, particularly when starting from low levels as employees strongly resist falling pay in cash terms.
The VocaLink manufacturing sector sub index showed a fourth consecutive monthly decline, falling to 2.3%. Despite the drop in the value of sterling, weak markets at home and abroad have sent the industry sector into recession. Take home pay growth in the service sector also edged down reaching 3.9% in November from 4.1% in October.
Richard Cooper, marketing director at VocaLink, said, “Since March the VocaLink take home pay index has become increasingly aligned to the retail sales index. With consumers finding it harder to obtain credit, it remains to be seen if VAT cuts along with price deflation will boost retail spending in the run up to Christmas.” The VocaLink take home pay index tracks monthly take-home pay levels in the UK.
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