Wages spike by 4.2% but are STILL rising slower than prices
Fears over inflation spiral as wages spike by 4.2% but are STILL rising slower than prices while unemployment falls to lowest level in FIVE DECADES – after Bank of England chief pleaded for people to shun pay hikes
- Regular pay rose by 4.2 per cent in the quarter to March but below inflation rate
- Total pay including bonuses was up by 7 per cent and higher in some sectors
- Unemployment has fallen to the lowest in five decades as jobs market tightens
Fears are mounting of an inflation spiral today after new figures showed wages spiking and unemployment dropping to a five-decade low.
Pay including bonuses jumped 7 per cent and was up 9.9 per cent in March as firms ramped up rewards for staff amid a booming jobs market.
However, regular pay was only up by 4.2 per cent – meaning a 1.2 per cent fall when inflation was taken into account.
There is also a big divide in different sectors, with finance and business services workers seeing a 10.7 per cent increase in their packets and employees in retailing, hotels and restaurants 8.5 per cent.
In contrast public sector staff had a 1.6 per cent rise – although they did fare better than the private sector during the pandemic.
The pressure on the labour market was also laid bare with the UK’s jobless rate tumbling to 3.7 per cent in the quarter to March – the lowest since 1974.
For the first time ever, there were fewer unemployed people than job vacancies.
The Office for National Statistics (ONS) also confirmed another rise in the number of UK workers on payrolls, up 121,000 between March and April to 29.5million.
After Bank of England governor Andrew Bailey yesterday repeated his plea for restraint on pay demands, Chancellor Rishi Sunak admitted Britons face ‘anxious times’.
For the first time ever, there were fewer unemployed people than job vacancies
Pay including bonuses jumped 7 per cent and was up 9.9 per cent in March as firms ramped up rewards for staff amid a booming jobs market. However, regular pay was only up by 4.2 per cent – meaning a 1.2 per cent fall when inflation was taken into account.
There is a big divide in different sectors, with finance and business services workers seeing a 10.7 per cent increase in their packets and employees in retailing, hotels and restaurants 8.5 per cent
But he said: ‘The unprecedented support we provided through our Plan for Jobs has led to the jobs market remaining robust despite global challenges, with the unemployment rate near record-lows and the number of payrolled employees at a record high.
‘I understand that these are anxious times for people, but it’s reassuring that fewer people are out of work than was previously feared, and we are helping them to keep more of their hard-earned money through tax cuts, changes to Universal Credit and support with household bills worth £22 billion this financial year.’
Darren Morgan, director of economic statistics at the ONS, said: ‘Total employment, while up on the quarter, remains below its pre-pandemic level.
‘Since the start of the pandemic, around half a million more people have completely disengaged from the labour market.’
He added: ‘Indeed, with the latest fall in unemployment, to its lowest rate since 1974, there were actually fewer unemployed people than job vacancies for the first time since records began.’
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