Unemployment in the United Kingdom (UK) rose to 3.8 per cent in the three months to February, up from 3.7 per cent in the previous three months, with pay growth wiped out by soaring inflation, new figures show.
Data from the UK Office for National Statistics (ONS) revealed regular pay, which excludes bonuses, fell by 2.3 per cent with inflation running at a 40-year high.
Total pay, which includes bonuses, dropped by 3 per cent in real terms once inflation was factored in, one of the largest falls in growth since comparable records began in 2001.
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Growth in average total pay was 5.9 per cent and growth in regular pay was 6.6 per cent from December 2022 to February 2023 before inflation was taken into account.
Darren Morgan, director of economic statistics at the ONS, said job vacancies had fallen again, the ninth consecutive month they have done so, but remain at very high levels.
The number of jobs available on the market plunged by 47,000 from the previous three months to 1,105,000.
The ONS said this reflects “uncertainty across industries, as survey respondents continue to cite economic pressures as a factor in holding back on recruitment”.
Around 220,000 more people were looking for work between December and February than in the previous three months.
Morgan said;
With the number of people neither working nor looking for a job down again, there were rises in both those in work and those actively looking for a job.
However, while the group outside the labour market – termed ‘economically inactive’ – fell, the number among them who were long-term sick rose to a new record high.
Meanwhile, pay continues to grow more slowly than prices, so earnings are still falling in real terms, although the gap between public and private sector earnings growth continues to narrow.
There were 348,000 working days lost to strike action in February, an increase from 210,000 in January, with most walkouts in the education sector, ONS figures showed.
But the figures also showed a rise in employment – to 75.8 per cent in the three months to February from 75.7 per cent in the previous three months – as more people returned to the jobs market in the face of the cost-of-living crisis.
Responding to the figures, Chancellor Jeremy Hunt said halving inflation was one of the Government’s top priorities as “rising prices continue to eat into pay cheques”.
He said;
To help families in the meantime, we are making work pay with a record increase in the National Living Wage, while providing cost of living support worth an average of £3,300 per household this year and last, funded through windfall taxes on energy profits.
Rachel Reeves, Labour’s shadow chancellor, accused the Tories of leaving a “gaping hole where their plan for growth should be”
