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UK total employment and pay growth hits record high

January 24, 2019

The number of people in work in the UK has reached a record high of 32.54 million, latest figures from the Office of National Statistics show.

 

Employment increased by the largest amount since the three months to April, although it is unclear whether businesses will maintain hiring at these levels as uncertainty around Brexit mounts.

 

Unemployment was flat, with a small increase of 8,000 between September and November for a total of 1.37 million.

 

The unemployment total is 68,000 lower than a year ago, with the jobless rate 0.2% down on this time in 2018. The number of job vacancies rose by 10,000 to a record high of 853,000.

 

The increase in both unemployment and employment is explained by the UK's rising population and fewer people being classed as economically inactive, which includes those on long-term sick leave, students, and people who have given up looking for a job.

 

ONS head of labour market David Freeman said: "The number of people working grew again, with the share of the population in work now the highest on record. "Meanwhile, the share of the workforce looking for work and unable to find it remains at its lowest for over 40 years, helped by a record number of job vacancies. "Wage growth continues to outpace inflation, which fell back slightly in the latest month."

 

Still, the Bank of England has said it will need to raise interest rates gradually to offset inflation pressures from the labour market.
 

Average weekly earnings, including bonuses, rose by 3.4 percent on the year, the biggest rise since mid-2008 and compared with a median forecast of 3.3 percent in a Reuters poll of economist.

 

Excluding bonuses, earning rose by an annual 3.3 percent in the three months to November. Adjusted for inflation, total pay rose at the fastest pace for two years.

 

However, Samuel Tombs, chief UK economist at Pantheon Macroeconomics, warned that the pace of wage increases may begin to ease.

 

"We doubt that wage growth will be sustained over the next six months at November's strong rate," he said, "Pay settlements likely will weaken this year, as the previous year's inflation rate usually is the starting point for negotiations.

 

"Note too that public sector wage growth also will decline later this year, because most NHS workers will receive only a 1.8% pay increase, down from 3.0% in 2018. Nonetheless, the labour market now looks tight enough to ensure that wage growth does not slip below the 3% mark."

 

Resources:

https://uk.reuters.com/article/uk-britain-economy-inflation/brexit-not-to-blame-for-shrinking-uk-chocolate-bars-ons-idUKKCN1PF12O

https://www.bbc.co.uk/news/business-46958560

 

 

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