Regular pay rose by an annual 2.3% in August, the fastest for 15 months. A measure of total pay growth, incorporating a 12-month moving average of bonuses, was 2.2%, a 19-month high – see first chart.

The annual rates of change of regular and total pay bottomed in late 2009 a few months after the retail prices index (RPI), which had been pushed down by interest rate cuts, house price falls and the temporary reduction in VAT. Current pay growth remains unusually low relative to RPI inflation, suggesting a further increase. Bonuses, in particular, could strengthen further, given buoyant corporate profits.

Elsewhere in today's labour market report, job vacancies fell further in September, suggesting that the recent recovery in employment will stall. A more positive message, however, emerges from the latest Monster survey of on-line recruitment activity: the employment index, which correlates with and may lead the official vacancies series, rose further last month – second chart. (The survey measures opportunities posted on corporate career sites and job boards, including Monster. The index levels in the chart have been seasonally adjusted.)