BBC 🔵 Pay growth slows but still outpaces rising prices – Shango Media
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BBC 🔵 Pay growth slows but still outpaces rising prices

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Wage growth slowed again in the British jobs market but is still outpacing price rises, official figures show.

Pay, excluding bonuses, grew by 6.2% in the last three months of 2023 compared with the same period a year before, according to the Office for National Statistics (ONS).

After taking price rises into account, pay went up by 1.9%.

But the statistics watchdog has said it could not guarantee the reliability of jobs market data.

The ONS is currently updating how it gathers information about employment, but this will not be fully in place until September.

The governor of the Bank of England, Andrew Bailey, has said that the ONS figures are the Bank’s only way to gauge unemployment, so their current unreliability is « posing challenges » as policymakers weigh up what to do about interest rates in the coming months.

As higher interest rates have hit business and household finances, pay growth has been slowing from the highs seen last summer and the number of job vacancies has been falling too.

According to the latest figures, wage growth in Britain fell from 6.6% to 6.2%, slightly higher than economists had expected.

The number of vacancies fell for the 19th time in a row, down 26,000 to 932,000 in the three months to January.

However, there were some signs that the downward trend in job vacancies could be slowing, Liz McKeown, director of economic statistics at the ONS, told the BBC’s Today programme.

  • How to get a job: Six expert tips for finding work
  • Five tips when asking for a pay rise

The latest unemployment figures also suggest that the jobs market remains fairly resilient.

The unemployment rate across the UK fell to 3.8% in the final three months of 2023, down from 3.9% in the three months to November. It marked the lowest level seen since the November 2022 to January 2023 period.

Chancellor Jeremy Hunt said: « It’s good news that real wages are on the up for the sixth month in a row and unemployment remains low, but the job isn’t done.

« Our tax cuts are part of a plan to get people back to work so we can grow the economy – but we must stick with it. »

Ms McKeown pointed out, though, that the new figures suggest there are historically high numbers of people saying they are long-term sick and unable to work or look for a new role.

Tony Wilson, director of the Institute for Employment Studies, said this rise in inactivity has happened despite rising salaries and the number of vacancies remaining above pre-pandemic levels.

« It reiterates the need for us to do far more to help people out of work to get into work, more to help people struggling in work to stay, and more to help employers fill their jobs. Otherwise weaknesses in our labour market will continue to hold back economic growth and widen social and economic inequalities, » he said.

Liz Kendall MP, Labour’s shadow work and pensions secretary, said that the higher number of those who are out of work due to long-term illness was « costing taxpayers billions more a year in spiralling benefit bills ».

She added that Labour would « tackle the root causes of worklessness by driving down NHS waiting lists, reforming social security » and « making work pay ».

Cost of living: Tackling it together

How to save money on petrol and diesel

  • Watch your speed: The RAC says 45-50mph is the most efficient speed to drive for fuel efficiency
  • Switch off the air conditioning: Extra energy is needed to power a car’s air conditioning system and turning it on can increase your fuel consumption by up to 10%, according to the AA
  • Check your tyre pressure: Underinflated tyres will use up extra petrol. Check your pressures regularly, especially before heading off on a long journey

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How can I save money on my food shop?

  • Look at your cupboards so you know what you have already
  • Head to the reduced section first to see if it has anything you need
  • Buy things close to their best before date which will be cheaper and use your freezer

Read more tips here

Related Topics

  • Companies
  • Employment
  • UK economy
  • Pay
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