Employment in the UK hit a record low last March to May. The Office for National Statistics released new data on Wednesday signifying an end to a four-decade struggle. However, wages fell for the third month in a row. Hence, indicating that Britons are living under wage squeeze despite a vigorous labor market.
A sign that UK should worry
The decline in U.K. real wages is a definite sign that the country must worry. U.K. belongs to the type of economy which depends greatly on consumer spending to achieve growth. Data show that economic growth has indeed slowed abruptly in the first quarter period as inflation grows. It leads shoppers to restrain spending.
Real wages fell by 0.5%, along with consumer prices increasing at a quicker rate than the workers’ earnings. Recorded inflation stands at 2.9%. In a period of four years, it is the fastest pace of price growth ever recorded in the history of U.K.
Lowest Unemployment Rate Since 1975
For the period of March to May, the unemployment rate slid to 4.5% and it is the lowest figure ever recorded since the year 1975.The last reading was at 4.6%. The number employed people significantly increased than before, hitting an all-time high.
It was reported that the employment rate grew to 74.9%, the highest data recorded since 1971. The Office of the National Statistics stated, “There were 32.01 million people in work, 175,000 more than for December 2016 to February 2017 and 324,000 more than for a year earlier. There were 1.49 million unemployed people (people not in work but seeking and available to work), 64,000 fewer than for December 2016 to February 2017 and 152,000 fewer than for a year earlier.”
Economic Growth Concerns
As Britain enters more complex exit negotiations with the European Union, there is a growing concern about economic growth. The target period to conclude all negotiations will be in March 2019.
Wages increased by 2% compared from the 1.7% rate back in May. However, it is still below the current rate of inflation Britain is facing.
The ONS further added, “Latest estimates show that average weekly earnings for employees in Great Britain in real terms (that is, adjusted for price of inflation) fell by 0.7% including bonuses, and fell by 0.5% excluding bonuses, compared with a year earlier.”
Senior Statistician at the ONS, Matt Hughes, “Despite the strong jobs picture, however, there has been another real-terms fall in total earnings, with the growth in weekly wages low and inflation still rising.”
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