Unemployment at record lows – but workers squeezed as pay still lags behind inflation
The statistics for the three months to October showed a 2.5 per cent increase in average earnings with prices rising 3 per cent
WAGES are rising at the fastest pace for a year – but the squeeze on Brits spending power is getting TIGHTER.
Official figures yesterday revealed average earnings rose by 2.5 per cent in the three months to October.
It’s the highest rate since December 2016.
But it was still not enough to prevent another fall in disposable income given spiralling inflation. The cost of living rose by 3 per cent in October.
The figures came in job data which revealed the biggest fall in employment for nearly three years – 56,000 to 32 million.
The drop was fuelled by the largest drop in the number of 18 to 24 year-olds in work since the credit crisis.
Stephen Clarke, economic analyst at the Resolution Foundation, said: “Britain’s remarkable jobs boom looks like it may have finally reached the end of the road. Equally Britain’s remarkable pay squeeze will continue to bite in the run-up to Christmas, with wage growth for 2018 expected to be anaemic at best.”
But experts in the City said there were signs wage growth was finally beginning to pick up as firms are forced to offer more to recruit staff.
George Buckley, chief UK economist at Nomura, said: “Job to job flows have picked up to levels seen before the financial crisis while the number of unemployed per vacancy has fallen to an all-time low.
“We might expect this to be associated with increased confidence in the labour market and as a consequence stronger wage growth.”
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Employment Minister Damian Hinds insisted the Government had ended the year on a “strong note” with the unemployment rate close to its lowest rate since the Seventies.
But Debbie Abrahams, Labour’s Shadow Work and Pensions Secretary, claimed Brits were paying the price of a “Tory economic failure”.
She said: “Both employment and real wages are falling while the price of household essentials balloons, leaving millions of people worse off than they were in 2010.”