UK unemployment fell by 75,000 in the three months to July, bringing the jobless rate down to 4.3% from 4.4% in the previous quarter.The rate remains at its lowest since 1975, but a squeeze on real incomes continues, according to the Office for National Statistics figures.Wages in the period were 2.1% up on a year earlier, little changed from the previous months’ growth rates.With inflation hitting 2.9% in August, wages are failing to keep up. In real terms, wages dropped by 0.4% in the three months to July.Matt Hughes, a senior ONS statistician, said: “Another record high employment rate and a record low inactivity rate suggest the labour market continues to be strong.”In particular, the number of people aged 16 to 64 not in the labour force because they are looking after family or home is the lowest since records began, at less than 2.1 million.”Despite earnings rising by 2.1% in cash terms over the last year, the real value of people’s earnings is down 0.4%.”Inflation has picked up sharply since the pound fell after the Brexit vote last year.
The data could further divide the Bank of England’s Monetary Policy Committee, which sets interest rates.While stagnating wage growth suggests the current surge in inflation could ease, growth in job hires points to greater strength in the economy.Unemployment is also below the level which the Bank expects to trigger faster pay growth.Last month two committee members backed a rate rise, and some economists says the Bank’s chief economist Andy Haldane could join them this week.While this would still leave the committee split 6-3 against raising rates from the record low 0.25%, it would boost market expectations about a move when the Bank updates its forecasts in November.Does your job pay less than it did five years ago?Wage stagnation and an ever increasing cost of living have left many people feeling poorer over the last few years.But for some workers skills shortages mean pay has shot up. Try out our calculator, then scroll down to find out the jobs market’s winners and losers…
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