Yahoo Finance UK pay rises but fails to keep up with inflation
Workers across the UK are getting less money in their pockets at the end of every month as regular pay in real terms fell by 2.4% in November to January, according to the Office for National Statistics (ONS).
The rate of UK unemployment stayed at 3.7% — the same as in the previous three-month period — and only a slight increase from a low not seen since 1974, the ONS said.
Regular pay excluding bonuses grew by 6.5% in November to January. Private sector workers saw a pay lift of 7% on average, while the public sector was at 4.8%. This was the highest growth for the public sector since early 2006.
Growth in average total pay (including bonuses) was 5.7% but that still isn’t enough to prevent a loss in real terms as the UK’s rate of inflation stands at 10.1%.
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This means that prices are rising fast than any pay, squeezing UK households’ incomes.
The number of job vacancies in the UK fell for the eighth month in a row between December and February to 1.1 million, official figures indicated.
The figures come a day ahead of Wednesday's budget when chancellor Jeremy Hunt is expected to set out plans to encourage people back into work.
Headline indicators for the UK labour market for November 2022-January 2023 show
▪️ employment was 75.7%
▪️ unemployment was 3.7%
▪️ economic inactivity was 21.3%
➡ https://t.co/oTTkpIIzGc pic.twitter.com/zx2vLdDkSd— Office for National Statistics (ONS) (@ONS) March 14, 2023
Darren Morgan, director of economic statistics at the ONS, said: “Recent trends have continued, with a slight rise in employment, especially among part-timers.
“Detailed figures from our business surveys also show record numbers of jobs in several sectors, including law and accountancy firms, health, and pubs and restaurants.
“In addition, the number of people neither working nor looking for a job fell overall, driven by a drop in young people.
“However, a record number of people were completely outside the labour market due to long-term sickness.
“Although the inflation rate has come down a little, it’s still outstripping earnings growth, meaning real pay continues to fall.”
He added: “The number of working days lost to strikes fell in January from the very high level seen in December. Nevertheless, many days were still lost, with education the most affected sector.”
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The number of working days lost to strike action totalled 220,000 in January. The number is down from 822,000 days lost to strikes in December 2022.
"Today’s figures suggest that economy-wide average weekly earnings (AWE), excluding bonuses, grew by 6.5% in the three months to January, 0.2 percentage points lower than last month, "Paula Bejarano Carbo, associate economist at the National Institute of Economic and Social Research (NIESR), said.
"This fall in AWE growth — after a year of sustained rises — can be attributed to a larger-than-expected decrease in private-sector regular AWE growth, which fell from 7.3% in the fourth quarter of 2022 to 7.0% in the three months to January.
"At the same time, we observed a larger-than-expected rise in public-sector regular AWE growth, which rose from 4.2% in Q4 to 4.8% in the three months to January.
"Ahead of the chancellor’s Spring budget tomorrow, it is important to note that public-sector wages need to ‘catch-up’ with private-sector wages as the gap between the two remains wide. If this gap cannot be closed, the government risks incurring further losses from prolonged industrial action or an outflow of skilled public sector workers."
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