UK jobs data: pay growth slows to 2%

Kingdom Of Great Britain

Wage growth across the economy has slowed to 2%, underlining the financial challenges facing households in the run-up to Christmas.

The Office for National Statistics (ONS) said that average wages grew at an annual rate of 2% in the three months to October.

That marked a significant weakening from the 2.4% growth seen in the previous three-monthly period. With inflation running at just 0.1%, living standards are still rising, on average. But anaemic pay growth undermines hopes that household balance sheets will continue to improve after the long post-recession squeeze that saw pay flat or falling for several years.

Once bonuses were included, pay growth in the three months to October was still just 2.4%, down from 3% over July to September, the ONS said.

UK average earnings annual growth rates
Wage growth has weakened. Illustration: ONS

Pay has remained weak, despite the unemployment rate falling to 5.2%, its lowest rate since 2006, and the share of the population in employment hitting a record high.

“The employment rate (the proportion of people aged from 16 to 64 who were in work) was 73.9%, the highest since comparable records began in 1971,” the ONS said.

George Osborne, the chancellor, stressed that his “national living wage”, which will see the minimum wage increase by 50p an hour for the over-25s in April, would help to underpin wages. “Our plan for a more prosperous future is delivering for working people with pay packets growing, and the new National Living Wage will deliver a further boost next year.”

The details of the announcement also marked the shifting composition of Britain’s workforce over the longer term, with just 17.1% of workers now employed in the public sector – the lowest proportion since records began in 1971.

The ONS also points out that the presence of non-UK nationals in the workforce has increased significantly since 1997, from 986,000, to 3.22 million: a shift from 3.7% of the workforce, to 10.3%.

Over the past 12 months, the number of UK nationals in work increased by 122,000; while almost three times as many jobs, 326,000, went to non-UK workers.

Powered by Guardian.co.ukThis article was written by Heather Stewart, for theguardian.com on Wednesday 16th December 2015 10.21 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010

 

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