UK unemployment fall pushes earnings growth to 11-year high
The number of Britons without a job fell in the three months to July to a 45-year low, official figures have shown today, helping total earnings growth hit a decade high.
Read more: Hiring intentions climb at financial services firms as Brexit nears
UK unemployment was estimated at 3.8 per cent in the period May to July, the Office for National Statistics (ONS) said, down from 3.9 per cent in the April to June period.
Lower unemployment helped boost wages when bonuses are included by four per cent, a rate not seen since 2009. Although if bonuses are not included wage growth dropped back to 3.8 per cent.
The wage rises mean that real total pay – with inflation taken into account – rose at 2.1 per cent, while regular pay rose at 1.9 per cent.
The strong figures come despite a slowdown in the UK economy, which shrank by 0.2 per cent in second quarter. Fears of a recession were allayed yesterday, however, when official figures showed the economy grew by 0.3 per cent in July.
Minister for employment Mims Davies said the “sustained boost in pay” was “supporting consumer confidence and giving a vital lift to millions of households who gain from greater financial security”.
The UK employment rate was 76.1 per cent in the three months to July, the ONS said, the joint-highest point on record. The annual employment increase was mainly driven by more women in work.
Davies said: “It’s especially pleasing to see continued record female employment at 72.1 per cent.”
The pound, driven by Brexit uncertainty, was down around 0.17 per cent against the dollar heading towards midday at $1.233.
Signs of a slowdown
Some economists have suggested that due to Brexit-related uncertainty and a global slowdown, firms are hiring workers who can be sacked later rather making longer-term investments.
However, there are some signs that jobs growth is slowing down. The number of vacancies from June to August fell by 23,000 compared to the three months to May, indicating that employers are looking to hire fewer workers.
Freeman said: “Vacancies continue to fall back from recent record highs, with much of this decline coming from small businesses.”
Tej Parikh, chief economist at business body the Institute of Directors, said: “At a testing time, the labour market is surpassing expectations, though there are early signs the jobs boom could be cooling down.”
“With the supply of available workers shrinking and uncertainty lingering, firms are now beginning to dial down their recruitment ambitions.”
Read more: UK economy shakes off recession fears with growth in June
“It’s becoming harder for business leaders to do any meaningful workforce planning, let alone find the talent that they need. High costs and an unclear view of future revenue have also led some to hold off on new hires.”
(Image credit: Getty)