The number unemployed in the UK has fallen to a 12-year low with the jobless rate the joint lowest since 1975, data from the Office for National Statistics (ONS) showed.

Employment among women reaches record high

While pay growth continues to lag behind inflation, the number of job vacancies has increased to a near-record high of 783,000, the figures showed.The ONS said the number out of work was cut by 52,000 in the quarter to August to 1.4 million, the lowest since 2005. More than 32 million people were in work, including 15 million women as the female employment rate reached a record 70.7 per cent.However, while average earnings increased by 2.2 per cent in the year to August, they remained well below the Consumer Price Index rate of inflation of three per cent.Employment minister Damian Hinds said, “Our economy is helping to create fulltime, permanent jobs which are giving people across the UK the chance of securing a reliable income.“We’ve boosted the income for people on the lowest pay by increasing the national living wage and delivered the fastest pay rise for the lowest earners in 20 years.“That’s great progress and we’re determined to help more people flourish in the world of work. For example, we’ve launched our new ‘Returnship’ programme to help more women get into good jobs after taking time out, and to keep their career progressing.”On the gap between wage increases and inflation, the Confederation of British Industry (CBI) said improvements in UK productivity – one of the worst in the G7 – was the only sustainable way to improved pay.

Living standards hit by weak productivity

Matthew Percival, head of employment at the CBI, said, “Persistently weak productivity, coupled with falling real wages, continues to hit living standards, underlining the need for the Chancellor to bold in his Budget (in November).“Delivering urgent progress on large and small infrastructure projects, addressing underfunding in education and providing practical support for innovators are all steps the government can take as part of a meaningful Industrial Strategy to boost productivity, the only sustainable route to improving people’s pay.”Research by the think-tank, the Resolution Foundation, found that, when adjusted for inflation, average earnings were now no no higher than they were 11 years ago.Stephen Clarke, the organisation’s economic analyst, said, “Today’s figures confirm the big picture trend that the UK labour market is great at creating jobs, but terrible at raising people’s pay.“The scale of the pay squeeze over the last decade is so vast that people today are earning no more than they did back in February 2006, despite the economy being 4.4 per cent bigger per person since then.”

Finance sector experiencing stronger pay growth

Prof Geraint Johnes, professor of economics at Lancaster University Management School, said the figures showed that workers in some sectors, notably finance, were faring better than others.“There has been some acceleration in pay in the financial and business services, where pay growth is now 2.7 per cent or, on the less reliable single-month measure, 3.1 per cent.“But in many industries – including the public sector, manufacturing, construction and distribution – pay growth is still below two per cent. This does not suggest that it is yet time for the Bank of England to be hiking interest rates.”Jeremy Cook, chief economist at WorldFirst, suggested that employment in the UK had now peaked and unemployment could soon start to rise as the squeeze on wages translated into consumers spending less, resulting in a fall in retail profits and a consequent cut in staff.“The story of the labour market remains the same: more people earning weaker wages. These figures do nothing to change our belief that a lack of real wage gains are going to continue to impinge on the ability of consumers to remain the driving force of UK growth,” Mr Cook said.

---

Related stories:

•  750,000 UK workers ‘set to flee to pastures new’
•  HR ahead of pack on gender pay, but disparities widen
•  Interest rates rise looms as inflation hits five-year high

---

“The pace of price increases is at a near-term high and the next few months may also mark the peak of employment. UK businesses, particularly those who import from abroad or are part of global supply chains, have laboured under a slowing economy and higher costs courtesy of the falling pound.“Should neither consumption nor investment provide these companies – particularly retailers - with a strong Christmas, then we would expect to see the ‘good’ news of falling unemployment start to reverse as businesses react to lost margins cutting into the corporate bone.”For related news and features, visit our Immigration section.Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Access hundreds of global services and suppliers in our Online Directory  

©2024 Re:locate magazine, published by Profile Locations, Spray Hill, Hastings Road, Lamberhurst, Kent TN3 8JB. All rights reserved. This publication (or any part thereof) may not be reproduced in any form without the prior written permission of Profile Locations. Profile Locations accepts no liability for the accuracy of the contents or any opinions expressed herein.