This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.theguardian.com/business/2016/apr/20/uk-unemployment-rises-and-pay-growth-falls
The article has changed 5 times. There is an RSS feed of changes available.
| Version 2 | Version 3 |
|---|---|
| UK unemployment rise: Crabb claims Brexit threat could be to blame | UK unemployment rise: Crabb claims Brexit threat could be to blame |
| (about 1 hour later) | |
| The threat of a potential vote to leave the EU in June could be partly to blame for the first rise in unemployment in seven months, the work and pensions secretary has warned. | The threat of a potential vote to leave the EU in June could be partly to blame for the first rise in unemployment in seven months, the work and pensions secretary has warned. |
| Stephen Crabb said the latest labour report, which showed the unemployment total rose by 21,000 in the three months to February to 1.7 million, was a signal that the looming EU referendum vote was hitting the jobs market. | Stephen Crabb said the latest labour report, which showed the unemployment total rose by 21,000 in the three months to February to 1.7 million, was a signal that the looming EU referendum vote was hitting the jobs market. |
| Crabb, who took over following the resignation of Iain Duncan Smith last month, said the uncertainty over the UK’s participation in the single market could be linked to the increase in joblessness. | Crabb, who took over following the resignation of Iain Duncan Smith last month, said the uncertainty over the UK’s participation in the single market could be linked to the increase in joblessness. |
| He told the BBC: “Mark Carney, the governor of the Bank of England,has also said that the question mark hanging over Britain’srelationship with the European single market is having a real-termsimpact on the British economy and impacting on sterling exchangerates, impacting on investment decisions.” | He told the BBC: “Mark Carney, the governor of the Bank of England,has also said that the question mark hanging over Britain’srelationship with the European single market is having a real-termsimpact on the British economy and impacting on sterling exchangerates, impacting on investment decisions.” |
| Related: Job market catches up with the real UK economy | Related: Job market catches up with the real UK economy |
| “There will be companies right now today who have been looking atmajor investments into the UK who are hanging back and consideringwhether that’s the right thing to do. So of course that will have animpact. | “There will be companies right now today who have been looking atmajor investments into the UK who are hanging back and consideringwhether that’s the right thing to do. So of course that will have animpact. |
| “Now, I’m not saying that the increase of 21,000 in unemployment is asa direct result of that, but it’s an example of the kind of reallygritty questions that those people who say Britain should leave thesingle market need to respond to and explain why their vision ofcoming out of the single market actually makes the picture better andenhances job opportunities for British workers.” | “Now, I’m not saying that the increase of 21,000 in unemployment is asa direct result of that, but it’s an example of the kind of reallygritty questions that those people who say Britain should leave thesingle market need to respond to and explain why their vision ofcoming out of the single market actually makes the picture better andenhances job opportunities for British workers.” |
| His comments sparked a row on the Conservative benches as Tory MPs accused Crabb of “cynically” linking Brexit to a rise in unemployment. | |
| Penny Mordaunt, the Armed Forces minister, said: “These unemployment figures are about people’s lives. They are not just statistics to be cynically dragged into the referendum debate. | |
| She added: “Remain campaigners should not do down the British economy, our entrepreneurs or our businesses. Our government has a strong record of creating jobs.” | |
| The rise in the jobless rate was the first since last August but left the headline unemployment rate unchanged at 5.1%. The claimant count, which measures people receiving out of work benefits, jumped by 6,700 in March, also the first such increase since August. | The rise in the jobless rate was the first since last August but left the headline unemployment rate unchanged at 5.1%. The claimant count, which measures people receiving out of work benefits, jumped by 6,700 in March, also the first such increase since August. |
| In a further blow to the government’s efforts to keep the economy growing strongly, wage growth including bonuses fell from 2.1% in January to 1.8%. The measure of wages excluding bonuses remained at 2.2%. | In a further blow to the government’s efforts to keep the economy growing strongly, wage growth including bonuses fell from 2.1% in January to 1.8%. The measure of wages excluding bonuses remained at 2.2%. |
| Analysts blamed a drop in City bonuses at the end of the financial year for much of the fall, but the economy has relied heavily on consumer spending to keep high street tills ringing and business services growing, so any fall is likely to hit GDP growth in the first quarter. | Analysts blamed a drop in City bonuses at the end of the financial year for much of the fall, but the economy has relied heavily on consumer spending to keep high street tills ringing and business services growing, so any fall is likely to hit GDP growth in the first quarter. |
| Crabb received support from the UK economist Kallum Pickering, of Berenberg Bank, who said Brexit uncertainty may begin to feature more prominently in the coming months “and temporarily reduce demand for new labour, as well as weigh on prospects for wage growth”. | Crabb received support from the UK economist Kallum Pickering, of Berenberg Bank, who said Brexit uncertainty may begin to feature more prominently in the coming months “and temporarily reduce demand for new labour, as well as weigh on prospects for wage growth”. |
| “There is a modest risk that unemployment could increase slightly and wage gains stagnate. But that wouldn’t be too much of a concern so long as the UK votes to stay in the EU,” he said. | “There is a modest risk that unemployment could increase slightly and wage gains stagnate. But that wouldn’t be too much of a concern so long as the UK votes to stay in the EU,” he said. |
| “Labour demand should begin to accelerate again after the vote. We expect unemployment to fall to 4.9% by the end of the year, further tightening in the labour market should begin to contribute to faster wage growth too.” | “Labour demand should begin to accelerate again after the vote. We expect unemployment to fall to 4.9% by the end of the year, further tightening in the labour market should begin to contribute to faster wage growth too.” |
| But most experts said the economic slowdown – dating back to last summer, and which has brought manufacturing and construction sector growth to a standstill – was more to blame for rising unemployment. | But most experts said the economic slowdown – dating back to last summer, and which has brought manufacturing and construction sector growth to a standstill – was more to blame for rising unemployment. |
| Related: Brexit would damage startup businesses, say entrepreneurs | Related: Brexit would damage startup businesses, say entrepreneurs |
| Scott Bowman, a UK economist at Capital Economics, said the lack of inflationary wage rises would prevent the Bank of England from raising interest rates in the near future. | Scott Bowman, a UK economist at Capital Economics, said the lack of inflationary wage rises would prevent the Bank of England from raising interest rates in the near future. |
| “Wage growth remains fairly subdued considering how much the labour market has tightened recently. With a sustained rise in wage growth still needing to be seen before inflationary pressures start to build, a rate hike still looks to be some way in the distance,” he said. | “Wage growth remains fairly subdued considering how much the labour market has tightened recently. With a sustained rise in wage growth still needing to be seen before inflationary pressures start to build, a rate hike still looks to be some way in the distance,” he said. |
| Laura Gardiner, a senior analyst at the Resolution Foundation, said it was concerning that pay growth had stalled at a time when inflation was rising, squeezing real incomes. | Laura Gardiner, a senior analyst at the Resolution Foundation, said it was concerning that pay growth had stalled at a time when inflation was rising, squeezing real incomes. |
| “One of the key routes to stronger pay growth is moving jobs, particularly for young people at the start of their careers,” she said. “The current lack of job mobility – which may reflect a lack of confidence among both young people and employers – risks holding back their careers and earning potential.” | “One of the key routes to stronger pay growth is moving jobs, particularly for young people at the start of their careers,” she said. “The current lack of job mobility – which may reflect a lack of confidence among both young people and employers – risks holding back their careers and earning potential.” |