UK employment hits fresh high as squeeze on real wages continues

The number of people employed in the UK has hit a fresh high as wages remain under pressure despite rising at the highest rate in almost a year, official data showed on Wednesday.
The Office for National Statistics said that between September and November there were 32.21 million people in work, an increase of 102,000 from the previous quarter. Overall, the employment rate was 75.3pc, a joint high since records began in 1971.
Unemployment fell to a four-decade low of 4.3pc in the three month period, to 1.44 million.
The pound surged to a post-Brexit high of $1.41 after the data was released.
Average earnings in the quarter beat forecasts, the ONS said, with earnings excluding bonuses increasing by 2.4pc compared to the same period the previous year, the biggest increase since December 2016, while including bonuses, the increase was 2.5pc.
However the increases are still below consumer price inflation at 3.1pc in November, leaving real wages lower than in the previous year.
David Freeman, ONS statistician said: “Demand for workers clearly remained strong.”  
He added: “Nevertheless inflation remains higher than pay growth and so the real value of earnings continues to decline.”
UK employment hits fresh high as squeeze on real wages continues

The Bank of England increased the rate of inflation in November

Chris J. Ratcliffe
The figures could cause concern for the Bank of England, which hiked interest rates for the first time in a decade in November, in the hope that the fall in unemployment would send wages higher.
But with the number of jobs vacancies also hitting a record high of 810,000, workers are unlikely to be able to negotiate pay increases.
James Athey of Aberdeen Standard Investments said: “For now, sluggish wage growth is the main obstacle to the Bank getting monetary policy back to normality quickly. Wages still aren’t keeping pace with inflation and this is putting pressure on consumer spending. That spending has been the lynchpin of the UK economy, so keeping it ticking along is critical.”
The ONS will report its estimate of UK economic growth in the final quarter of 2017 and also for growth over the full calendar year on Friday.
Ben Brettell, an economist Hargreaves Lansdown, said a dip in real wages could have an impact. “The concern is that the consumer squeeze will start to feed through into lower economic growth,” he said.
See also:
Leave a comment
  • Latest
  • Read
  • Commented
Calendar Content
«    Февраль 2020    »