The UK unemployment rate fell to 3.8 per cent in the three months to December 2019, down 0.1 points on the previous quarter.
Average weekly wages reached £512 in the three months to December – their highest level since the 2008 crash.
The UK hit an important living standards milestone at the end of 2019 as real average weekly pay finally surpassed its pre-crisis peak, though the 12-year pay downturn has left average earnings £141 a week behind their pre-crisis trend, the Resolution Foundation said today (Tuesday) in response to monthly labour market data released by the Office for National Statistics.
In data crammed with labour market records – including another welcome high for employment at 76.5 per cent – real average weekly earnings (excluding bonuses) grew by 1.8 per cent in the three months to December to hit a new record level of £512 – surpassing the August 2007 peak by £1.
The Foundation welcomes this major living standards milestone, but notes that had pay continued along its pre-crisis path, real average weekly earnings today would be £141 a week higher. The milestone comes as nominal pay growth continues to soften – falling back from 3.9 per cent in mid-2019 to 3.2 per cent by the end of the year.
Alongside welcome news on pay, employment reached a new record high while unemployment remained at a near 50-year low of 3.8 per cent.
The Foundation notes that the UK labour market is both growing and changing – with the number of people in self-employment or on zero-hours contracts (5.03 million and 973,000 respectively) also at record highs. This shows that atypical – and sometimes insecure – work is a significant and seemingly permanent feature of the UK labour market, says the Foundation.
Nye Cominetti, Senior Economist at the Resolution Foundation, said:
“The return to record pay at the end of 2019 marks an important – and welcome – milestone for the UK.
“However, the fact that is has taken 12 years to get to this point shows what a living standards disaster our pay packets have been. Workers are, on average, nearly £150 a week worse off than if the pre-crisis pay growth had continued.
“But while earnings have disappointed, employment has continued to break new ground – ending the decade at another record high.
“Beneath the headline rate, record levels of self-employment and zero-hours contracts show that the labour market is both growing and changing. Atypical employment is a significant feature of our jobs market, and our legislation needs to catch up.”
Meanwhile Chancellor Rishi Sunak confirmed this morning that he will deliver his first Budget on 11 March. Sunak said he is currently ‘cracking on with preparations’ to ‘deliver on the promises we made to the British people’. There had been speculation that it might be delayed.
