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Jobless rate down but wage growth slows | Jobless rate down but wage growth slows |
(35 minutes later) | |
UK unemployment fell in the three months to January but there was a sharp slowdown in wage growth. | |
The Office for National Statistics (ONS) said the unemployment rate fell to 4.7% - it has not been lower than that since the summer of 1975. | |
However, wage growth has slowed significantly to 2.2% from 2.6% in the previous three-month period. | However, wage growth has slowed significantly to 2.2% from 2.6% in the previous three-month period. |
Wages are rising above the rate of inflation, which is currently 1.8%, but the gap has narrowed. | |
Scott Bowman, UK economist at Capital Economics, said: "The latest UK labour market data suggest that average earnings growth is not picking up alongside inflation, resulting in a squeeze on real wage growth." | Scott Bowman, UK economist at Capital Economics, said: "The latest UK labour market data suggest that average earnings growth is not picking up alongside inflation, resulting in a squeeze on real wage growth." |
But he expects that a shortage of workers will push up pay in the coming months. | But he expects that a shortage of workers will push up pay in the coming months. |
'Completely unprecedented' | |
Following last week's Budget, Paul Johnson, director of the Institute for Fiscal Studies (IFS) warned that wages were unlikely to be higher in the next five years. | Following last week's Budget, Paul Johnson, director of the Institute for Fiscal Studies (IFS) warned that wages were unlikely to be higher in the next five years. |
He said: "On current forecasts average earnings will be no higher in 2022 than they were in 2007. Fifteen years without a pay rise. This is completely unprecedented." | He said: "On current forecasts average earnings will be no higher in 2022 than they were in 2007. Fifteen years without a pay rise. This is completely unprecedented." |
The unemployment rate was last at 4.7% in 2005 and has not been below that since the summer of 1975. | |
The ONS said there are 1.58m people out of work and 31.85m Britons in full-time and part-time employment. | |
The ONS also released data on the number of people on zero hour contracts in their main job, which rose by 101,000 between October and December to 905,000. | |
This is equal to 2.8% of all people in employment. |