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| UK state pension likely to rise by 4.7% under triple lock | UK state pension likely to rise by 4.7% under triple lock |
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| Increase will put further pressure on Rachel Reeves as ONS figures show pay growth slowing and job losses rising | Increase will put further pressure on Rachel Reeves as ONS figures show pay growth slowing and job losses rising |
| Explainer: what is the triple lock, and could it be ditched? | Explainer: what is the triple lock, and could it be ditched? |
| UK pay growth stays high – but Britons are feeling the pinch | UK pay growth stays high – but Britons are feeling the pinch |
| Business live – latest updates | Business live – latest updates |
| Millions of people are poised for an above-inflation 4.7% increase in their state pension payments, adding to pressure on the government finances as Rachel Reeves explores raising taxes at the autumn budget. | Millions of people are poised for an above-inflation 4.7% increase in their state pension payments, adding to pressure on the government finances as Rachel Reeves explores raising taxes at the autumn budget. |
| Labour has committed to retaining the triple lock on the state pension, which guarantees annual increases in line with whichever is the higher of 2.5%, inflation in September or annual earnings growth in the three months to July. | Labour has committed to retaining the triple lock on the state pension, which guarantees annual increases in line with whichever is the higher of 2.5%, inflation in September or annual earnings growth in the three months to July. |
| Official figures published on Tuesday show average weekly earnings including bonuses were 4.7% higher in May to July than in the same period a year earlier. | Official figures published on Tuesday show average weekly earnings including bonuses were 4.7% higher in May to July than in the same period a year earlier. |
| Experts said the increase put state pensioners in line for their payments to go up by that amount from next April because inflation in September – currently running at 3.8% – was unlikely to be higher. | Experts said the increase put state pensioners in line for their payments to go up by that amount from next April because inflation in September – currently running at 3.8% – was unlikely to be higher. |
| A final decision will be taken by the government before the budget. However, Pat McFadden, the work and pensions secretary, confirmed on Tuesday that the triple lock promise would be honoured. | A final decision will be taken by the government before the budget. However, Pat McFadden, the work and pensions secretary, confirmed on Tuesday that the triple lock promise would be honoured. |
| “That’s a commitment from the Labour government to the UK’s pensioners,” he said. “It’s something that we said we’d do at the election and something that we will keep to.” | “That’s a commitment from the Labour government to the UK’s pensioners,” he said. “It’s something that we said we’d do at the election and something that we will keep to.” |
| The latest figures are expected to translate into an annual rise worth more than £500 for those on the new state pension, which would increase from £230.25 a week to £241.05 a week from April. Those retiring on the basic state pension would see their weekly income increase from £176.45 a week to £184.75. | The latest figures are expected to translate into an annual rise worth more than £500 for those on the new state pension, which would increase from £230.25 a week to £241.05 a week from April. Those retiring on the basic state pension would see their weekly income increase from £176.45 a week to £184.75. |
| Successive governments have committed to the triple lock since it was first introduced by George Osborne in 2010, despite criticism that protecting pensioner incomes comes with a costly price tag for the public purse and risks fuelling intergenerational inequalities. | Successive governments have committed to the triple lock since it was first introduced by George Osborne in 2010, despite criticism that protecting pensioner incomes comes with a costly price tag for the public purse and risks fuelling intergenerational inequalities. |
| The Office for Budget Responsibility projects that state pension costs will rise from about 5% of GDP now to about 8% by the 2070s. Half of the increase is driven by the triple lock, at a time of rising pressure on other areas of spending and social care. | The Office for Budget Responsibility projects that state pension costs will rise from about 5% of GDP now to about 8% by the 2070s. Half of the increase is driven by the triple lock, at a time of rising pressure on other areas of spending and social care. |
| The Institute for Fiscal Studies has called for the policy to be scrapped. Heidi Karjalainen, a senior research economist at the thinktank, said: “The triple lock has so far been much costlier than initially expected, and it creates a lot of uncertainty in terms of future spending. | The Institute for Fiscal Studies has called for the policy to be scrapped. Heidi Karjalainen, a senior research economist at the thinktank, said: “The triple lock has so far been much costlier than initially expected, and it creates a lot of uncertainty in terms of future spending. |
| “If the economy is doing well then it won’t cost more than increasing the state pension in line with average earnings growth, whereas in volatile periods it can become very costly – as we have seen in the last decade and a half.” | “If the economy is doing well then it won’t cost more than increasing the state pension in line with average earnings growth, whereas in volatile periods it can become very costly – as we have seen in the last decade and a half.” |
| It comes as official figures showed the UK’s jobs market has continued to cool, amid a slowdown in annual pay growth and rising redundancies. | It comes as official figures showed the UK’s jobs market has continued to cool, amid a slowdown in annual pay growth and rising redundancies. |
| The ONS said annual growth in regular earnings excluding bonuses slowed to 4.8% in the three months to July, down from 5% in the three months to June, matching the forecasts of City economists. | The ONS said annual growth in regular earnings excluding bonuses slowed to 4.8% in the three months to July, down from 5% in the three months to June, matching the forecasts of City economists. |
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| The official unemployment rate was unchanged on the previous month in July, at 4.7%, the highest level in four years. | |
| Business groups have complained since Reeves’s first autumn budget that her £25bn increase in employer national insurance contributions and 6.7% rise in the “national living wage” would force them to cut jobs and raise prices for consumers. | Business groups have complained since Reeves’s first autumn budget that her £25bn increase in employer national insurance contributions and 6.7% rise in the “national living wage” would force them to cut jobs and raise prices for consumers. |
| Economists said there was clear evidence of the jobs market cooling. Separate figures from HMRC showed a decline in the number of workers on company payrolls of 8,000, matching City forecasts. | Economists said there was clear evidence of the jobs market cooling. Separate figures from HMRC showed a decline in the number of workers on company payrolls of 8,000, matching City forecasts. |
| After taking account of inflation, annual growth in regular pay was 1.2% in the three months to July, down from 1.5%. | After taking account of inflation, annual growth in regular pay was 1.2% in the three months to July, down from 1.5%. |
| Reeves is widely expected to raise taxes in her autumn budget. However, business leaders have warned a weaker growth outlook will make it harder for her to raise taxes without further harming the economy. | Reeves is widely expected to raise taxes in her autumn budget. However, business leaders have warned a weaker growth outlook will make it harder for her to raise taxes without further harming the economy. |
| Daisy Cooper, the Liberal Democrat Treasury spokesperson, said Labour had committed an act of “self sabotage” by pushing more people out of work. “[It has put] even more pressure on already stretched public services and leaving businesses scrambling just to keep the lights on.” | Daisy Cooper, the Liberal Democrat Treasury spokesperson, said Labour had committed an act of “self sabotage” by pushing more people out of work. “[It has put] even more pressure on already stretched public services and leaving businesses scrambling just to keep the lights on.” |
| Strong wage growth has caused a headache for the Bank of England by stoking inflationary pressures, putting further interest rate cuts at risk after four reductions in the past year. However, a deeper slowdown in the jobs market could show the economy is deteriorating, supporting faster rate cuts. | Strong wage growth has caused a headache for the Bank of England by stoking inflationary pressures, putting further interest rate cuts at risk after four reductions in the past year. However, a deeper slowdown in the jobs market could show the economy is deteriorating, supporting faster rate cuts. |
| The Bank is expected to keep its base rate unchanged at 4% at its next policy meeting on Thursday. | The Bank is expected to keep its base rate unchanged at 4% at its next policy meeting on Thursday. |