Wages are rising faster but figures out this morning suggest a cooling of the Labour market
The rate of UK unemployment was 3.7% in the three months to December, unchanged from the previous three months, the Office for National Statistics has said this morning
Take home pay is falling at one of the fastest rates on record despite wage growth racing ahead at the quickest rate outside the pandemic.
However the proportion of people who have quit the jobs market altogether – dropped 0.3 percentage points and while the official figures show the UK’s unemployment rate at 3.7%, the actual ‘hidden’ unemployment rate is more than three times higher at 12.1%
Ben Harrison, Director of the Work Foundation at Lancaster University, a leading think tank for improving working lives in the UK says
“Today’s figures suggest the cost of living crisis is pushing young people back into work from economic inactivity at time when everyone is feeling poorer – with employment rising by 53,000 people (0.2 percentage points). This should not mask the fact that real pay is down 2.5% on the year for workers, with those in the public sector hit hardest despite moderate pay growth that continues to fall short of double-digit inflation.
“Employers, workers and job seekers are feeling the squeeze. With the IMF singling the UK economy to be the only major economy to shrink in 2023, persistent worker shortages are likely to become a vital political topic in the months to come.
“The Government has hinted it will double down on its approach of increasing welfare sanctions, notionally intended to get those out of work into any job and those in part-time work to up their hours. The reality is this will not help grow the UK economy nor support people into sustained employment. But it will acutely increase the stress and anxiety of low-income workers and their families.
“Instead, we need long-term investment and reform to make employment services more inclusive and effective, and an Employment White Paper to strengthen worker rights and protections to be fit for the 21st century.”
