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UK wage growth still high despite unemployment risePublished53 minutes agoShareclose panelShare pageCopy linkAbout sharingImage source, Getty ImagesBy Dearbail JordanBusiness reporter, BBC NewsUK wage growth remained strong even as the UK unemployment rate rose to its highest for almost a year.The jobless rate increased to 4.3% between January and March, the highest since May to July last year, the Office for National Statistics (ONS) said.The number of vacancies also slowed meaning more unemployed people are competing for the same jobs.But pay rises, excluding bonuses, remained at 6%. It had been expected to slow to 5.9% between January and March.Taking inflation – which measures the pace of price rises – into account, wages rose by 2.4%. Liz McKeown, director of economic statistics at the ONS, said that “real pay growth remains at it highest level in well over two years”.But she also said there were others “tentative signs” that the British jobs markets is “cooling”.Jobs on offer in the UK dropped by 26,000 to 898,000 vacancies between February and April. The total remains higher than pre-pandemic levels but Ms McKeown said: “With unemployment also increasing, the number of unemployed people per vacancy has continued to rise, approaching levels seen before the onset of Covid-19.”Chancellor Jeremy Hunt said wage rises would “help with the cost of living pressures on families”. He added: “While we are dealing with some challenges in our labour supply, including pandemic impacts, as our reforms on childcare, pensions tax reform and welfare come online I am confident we will start to increase the number of people in work.”But Labour’s acting shadow work and pensions secretary, Alison McGovern, said “these damning new figures prove that things are just getting worse”.She said: “It’s no wonder there are now a record number of people locked out of work due to long-term sickness, given NHS waiting lists are spiralling and the Tories have pushed our NHS to its knees.”When will interest rates come down?Sunak says it’ll take time for people to feel betterThe rate of people considered “economically inactive” – defined as those aged between 16 to 64 years old not in work or looking for a job – edged a little lower to 22.1% in the first three months of the year. The ONS said the increase in economic inactivity in the latest quarter was largely driven by people not be working “because they were temporarily sick, long-term sick, or retired”.It has warned, however, that its figures should be treated with a degree of caution because they are based on a smaller sample of household questionnaires than it used to rely on before Covid.Interest ratesWhile overall pay growth, excluding bonuses, was unchanged between January and March, it slowed a little to 5.9% for private employers. The wage figures will be closely watched by the Bank of England to decide if and when interest rates can be cut. The next rate-setting meeting is in June and there are a number of key economic releases before then which the Bank will use to make its decision. This includes inflation as well as wage figures for April, when an increase in the National Living Wage came into force.”While the further easing in regular private sector pay in March suggests that wage pressures faded a bit faster than the Bank of England expected, broader measures of wage growth are probably still a bit too strong for the Bank’s liking,” said Ashley Webb, UK economist at Capital Economics.”At the margin, this may make the Bank a bit more uneasy about first cutting interest rates in June.”At its most recent meeting, Bank governor Andrew Bailey said he was “optimistic that things are moving in the right direction”, though he added that a fall in borrowing costs was “not a fait accompli”. Rates have been 5.25% since last August, the highest level in 16 years.Are you affected by the issues raised in this story? Share your experiences by emailing haveyoursay@bbc.co.uk, external.Please include a contact number if you are willing to speak to a BBC journalist. You can also get in touch in the following ways:WhatsApp: +44 7756 165803Tweet: @BBC_HaveYourSay, externalUpload pictures or video, externalPlease read our terms & conditions and privacy policy
If you are reading this page and can’t see the form you will need to visit the mobile version of the BBC website to submit your question or comment or you can email us at HaveYourSay@bbc.co.uk, external. Please include your name, age and location with any submission. Related TopicsUnemploymentEmploymentUK economyOffice for National StatisticsMore on this storySunak says it’ll take time for people feel betterPublished3 days agoWhen will interest rates come down?Published4 days agoUnemployment jumps as UK jobs market stallsPublished16 April
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