Total of Britons in work hits new high
The number of people employed in the UK has reached a new record high of 32.39 million, latest data from the Office for National Statistics (ONS) showed.
12 June 2018The total in work was 440,000 higher than a year earlier and represented an employment rate of 75.6 per cent, the joint highest since comparable records began in 1971.Meanwhile, there were 1.42 million on the jobless register, a fall of 115,000 on the figure reported this time last year.
Related stories:
Ian Brinkley, acting chief economist at the CIPD, the professional body for HR and people development, says, “It’s positive to see the labour market continuing to expand, with more people in work pushing the employment rate even higher and unemployment falling to 4.2 per cent. While regular pay growth has reduced a little, comparing the figures to those in the same period last year, real pay continues to grow at much the same rate as before, as inflation has also edged down.“However, there are signs of underlying weakness. Employment growth has become much more dependent on part time work, so total hours worked have fallen. Female part-time employment makes up more than a third of the annual increase in employment, which may suggest that employers are being forced to offer more flexible hours to attract more applicants against the backdrop of a tightening labour market and falling net migration.“Overall, the labour market is expanding more slowly than in the past, and the hours worked measure has contracted slightly. As things stand, this looks more like a short term hiatus than the start of a more sustained decline.“There is no sign that falling unemployment is feeding into higher wage growth, backing the Bank of England’s judgement that there is no immediate need for an interest rate rise.”Conor D’Arcy, senior policy analyst at the Resolution Foundation think-tank, expressed concern at the disappointing rate of wage growth. “The UK jobs market has continued to impress in 2018, with employment remaining at a record high and female unemployment falling to its lowest ever level,” he said.“But we’re yet to see the good news on jobs feed into wage pressure, with nominal pay growth still below three per cent. While the easing of inflationary pressures is helping pay packets to stretch that little bit further, there is still no sign of a long overdue pay rebound in Britain.”
Access hundreds of global services and suppliers in our Online Directory
Wage growth not as strong as expected
The only disappointing news in the ONS data was an unexpected fall, from 2.9 to 2.8 per cent, in wage growth in the three months to April – a dip that dampened expectations of the Bank of England increasing interest rates in August, even though the wage inflation remains ahead of the 2.4 per cent inflation rate.Secretary of State for Work and Pensions Esther McVey welcomed the latest figures. “The employment rate has never been higher – with over 3.3 million people moving into work since 2010. It’s a Great British success story with businesses from Exeter to Edinburgh creating jobs – helping, on average, 1,000 people find a job each and every day since 2010.“And with the increase in the personal tax allowance, this government has ensured that people are keeping more of their money before they begin paying tax – meaning more take-home pay, that’s more money in your pocket for you and your family.”Related stories:
- Brexit and skills shortages 'dog economic prospects'
- Pound buoyed by services sector bounce
- UK labour market buoyed by rising global demand
Ian Brinkley, acting chief economist at the CIPD, the professional body for HR and people development, says, “It’s positive to see the labour market continuing to expand, with more people in work pushing the employment rate even higher and unemployment falling to 4.2 per cent. While regular pay growth has reduced a little, comparing the figures to those in the same period last year, real pay continues to grow at much the same rate as before, as inflation has also edged down.“However, there are signs of underlying weakness. Employment growth has become much more dependent on part time work, so total hours worked have fallen. Female part-time employment makes up more than a third of the annual increase in employment, which may suggest that employers are being forced to offer more flexible hours to attract more applicants against the backdrop of a tightening labour market and falling net migration.“Overall, the labour market is expanding more slowly than in the past, and the hours worked measure has contracted slightly. As things stand, this looks more like a short term hiatus than the start of a more sustained decline.“There is no sign that falling unemployment is feeding into higher wage growth, backing the Bank of England’s judgement that there is no immediate need for an interest rate rise.”Conor D’Arcy, senior policy analyst at the Resolution Foundation think-tank, expressed concern at the disappointing rate of wage growth. “The UK jobs market has continued to impress in 2018, with employment remaining at a record high and female unemployment falling to its lowest ever level,” he said.“But we’re yet to see the good news on jobs feed into wage pressure, with nominal pay growth still below three per cent. While the easing of inflationary pressures is helping pay packets to stretch that little bit further, there is still no sign of a long overdue pay rebound in Britain.”
Uphill fight for real wage growth
Suren Thiru, head of economics at the British Chambers of Commerce, added, “While pay is still outpacing price growth, the slowdown in earnings growth is a concern. Delivering sustained rises in real pay growth is likely to prove an uphill struggle amid weak productivity and a sluggish economy.“As a consequence, household finances are likely to remain stretched, particularly given weak household savings and high debt levels. The slowdown in earnings growth, together with the recent weakness in a raft of other economic indicators, undermines the case for tightening monetary policy.” John Hawksworth, chief economist at PwC, said, “Today’s data confirmed generally positive trends in the jobs market in recent months, with the employment rate remaining at a record high and the unemployment rate at its lowest levels since 1975.“But average hours worked fell back somewhat in the last three months. Total hours worked actually fell slightly over this period compared to the previous three months. This helps to explain why total output growth has been relatively weak recently despite solid growth in the number of jobs.“Overall, this new data does not significantly alter the big picture of a modestly growing economy combining relatively strong growth in jobs with weaker growth in productivity per worker and, linked to this, only modest real pay growth.”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.
