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| Brexit blow to workers as real pay starts to fall again - as it happened | Brexit blow to workers as real pay starts to fall again - as it happened |
| (7 months later) | |
| Here’s a round up of the day’s events. | Here’s a round up of the day’s events. |
| Regular pay growth (excluding bonuses), was 1.9% in February, lower than the 2.3% rate of inflation in the same month. It was the first time since August 2014 that inflation has outpaced wage growth and signalling that a Brexit-related squeeze in UK living standards is underway (the fall in the value of the pound since the vote is pushing up inflation). | Regular pay growth (excluding bonuses), was 1.9% in February, lower than the 2.3% rate of inflation in the same month. It was the first time since August 2014 that inflation has outpaced wage growth and signalling that a Brexit-related squeeze in UK living standards is underway (the fall in the value of the pound since the vote is pushing up inflation). |
| Over the broader three-month period to the end of February, regular pay growth slipped to 2.2% from 2.4% in the three months to January. Pay growth including bonuses was unchanged at 2.3%. | Over the broader three-month period to the end of February, regular pay growth slipped to 2.2% from 2.4% in the three months to January. Pay growth including bonuses was unchanged at 2.3%. |
| Unemployment remained at a 42-year low of 4.7%, and the employment rate also stayed at the highest level since records began in 1971, at 74.6%. | Unemployment remained at a 42-year low of 4.7%, and the employment rate also stayed at the highest level since records began in 1971, at 74.6%. |
| Tesco reported that profits have once again broken through £1bn, after annual sales grew at its UK chain for the first time in seven years. Shares are down more than 5% however, making it the FTSE 100’s biggest faller. | Tesco reported that profits have once again broken through £1bn, after annual sales grew at its UK chain for the first time in seven years. Shares are down more than 5% however, making it the FTSE 100’s biggest faller. |
| Sports Direct named Alex Balacki, a store manager in Barnstaple, as its first employee representative to attend board meetings, as the retailer attempts to clean-up its reputation. | Sports Direct named Alex Balacki, a store manager in Barnstaple, as its first employee representative to attend board meetings, as the retailer attempts to clean-up its reputation. |
| Over in Brussels, the IMF’s Christine Lagarde warned Donald Trump’s protectionist stance could result in a “self-inflicted wound” for the global economy. | Over in Brussels, the IMF’s Christine Lagarde warned Donald Trump’s protectionist stance could result in a “self-inflicted wound” for the global economy. |
| European markets were subdued. The FTSE 100 is currently down 10 points at 7,356. The pound is up 0.06% against the dollar at $1.2495. | European markets were subdued. The FTSE 100 is currently down 10 points at 7,356. The pound is up 0.06% against the dollar at $1.2495. |
| On that note, it’s time to close for the day. Thanks for all your comments, and we’ll be back tomorrow. | On that note, it’s time to close for the day. Thanks for all your comments, and we’ll be back tomorrow. |
| Over in Athens, Christine Lagarde’s comments have caused much ado, with some officials regarding the IMF chief’s insistence on debt relief “ a big plus” in ongoing negotiations with creditors. | Over in Athens, Christine Lagarde’s comments have caused much ado, with some officials regarding the IMF chief’s insistence on debt relief “ a big plus” in ongoing negotiations with creditors. |
| Prime minister Alexis Tsipras’ leftist-led government has from the outset set debt relief as a goal, saying it must be part of an all-conclusive package that will ultimately define Greece’s post-bailout future. | Prime minister Alexis Tsipras’ leftist-led government has from the outset set debt relief as a goal, saying it must be part of an all-conclusive package that will ultimately define Greece’s post-bailout future. |
| The Greek finance minister Euclid Tsakalotos will make the case when he holds talks with Christine Lagarde and the US treasury secretary Steven Mnuchin at the Fund’s spring meetings in Washington next week. Tskalotos says he is confident of a solution “well before the summer.” | The Greek finance minister Euclid Tsakalotos will make the case when he holds talks with Christine Lagarde and the US treasury secretary Steven Mnuchin at the Fund’s spring meetings in Washington next week. Tskalotos says he is confident of a solution “well before the summer.” |
| But Lagarde’s insistence that a lot still remains to be done also reflects mounting concerns that differences between Athens and creditors are far from being resolved. International auditors representing lender keeping the debt-stricken country afloat were meant to have resumed inspections in the Greek capital this week. Fears are rising that despite a “preliminary deal” thrashed out with euro group finance ministers last week, time is fast running out to complete the compliance review at the heart of Athens latest standoff with lenders in time in time for the euro group’s next meeting in May. | But Lagarde’s insistence that a lot still remains to be done also reflects mounting concerns that differences between Athens and creditors are far from being resolved. International auditors representing lender keeping the debt-stricken country afloat were meant to have resumed inspections in the Greek capital this week. Fears are rising that despite a “preliminary deal” thrashed out with euro group finance ministers last week, time is fast running out to complete the compliance review at the heart of Athens latest standoff with lenders in time in time for the euro group’s next meeting in May. |
| Let’s take a look at the markets. | Let’s take a look at the markets. |
| The FTSE 100’s earlier gains have been erased and the index is now down 9 points or 0.1% at 7,357. | The FTSE 100’s earlier gains have been erased and the index is now down 9 points or 0.1% at 7,357. |
| Here is how markets are doing elsewhere in Europe: | Here is how markets are doing elsewhere in Europe: |
| Germany’s DAX: +0.03% at 12,143 | Germany’s DAX: +0.03% at 12,143 |
| France’s CAC: +0.2% at 5,110 | France’s CAC: +0.2% at 5,110 |
| Italy’s FTSE MIB: -0.5% at 20,016 | Italy’s FTSE MIB: -0.5% at 20,016 |
| Spain’s IBEX: -0.3% at 10,383 | Spain’s IBEX: -0.3% at 10,383 |
| Europe’s STOXX 600: +0.2% at 382 | Europe’s STOXX 600: +0.2% at 382 |
| Back in the UK, the inaugural international FinTech conference has been taking place in London. | Back in the UK, the inaugural international FinTech conference has been taking place in London. |
| The sector - which includes things like contactless payments, banking apps and online crowd funding - employs more than 60,000 people in the UK and is worth nearly £7 billion to the UK economy according to the Treasury. | The sector - which includes things like contactless payments, banking apps and online crowd funding - employs more than 60,000 people in the UK and is worth nearly £7 billion to the UK economy according to the Treasury. |
| The government is hopeful that Britain will remain a frontrunner in FinTech after it has left the EU. | The government is hopeful that Britain will remain a frontrunner in FinTech after it has left the EU. |
| However, the chancellor Philip Hammond warned delegates that it won’t come easy: | However, the chancellor Philip Hammond warned delegates that it won’t come easy: |
| We can’t remain the number one place for FinTech and the other technologies of the fourth industrial revolution by simply relying on our ingenuity, talent and openness, we have to go out and get the business. | We can’t remain the number one place for FinTech and the other technologies of the fourth industrial revolution by simply relying on our ingenuity, talent and openness, we have to go out and get the business. |
| We will have to strive and graft and fight to seize the opportunities - and make the most of them. | We will have to strive and graft and fight to seize the opportunities - and make the most of them. |
| That means growing and strengthening the areas – like Fintech – in which we enjoy a competitive advantage… while we need to continue to attract the brightest and the best from around the world to these shores. We must also do better at nurturing and developing the home-grown talent to drive our economy forward in the future. | That means growing and strengthening the areas – like Fintech – in which we enjoy a competitive advantage… while we need to continue to attract the brightest and the best from around the world to these shores. We must also do better at nurturing and developing the home-grown talent to drive our economy forward in the future. |
| Our vision of an outward-looking, Global Britain will deliver the high-skilled, high-wage economy of the future that will power the higher living standards we all want to see for future generations. | Our vision of an outward-looking, Global Britain will deliver the high-skilled, high-wage economy of the future that will power the higher living standards we all want to see for future generations. |
| Lagarde has also commented on Greece, saying the Greek government was heading in the right direction on reforms but talks on the bailout and the IMF’s potential bailout were “only halfway through”. | Lagarde has also commented on Greece, saying the Greek government was heading in the right direction on reforms but talks on the bailout and the IMF’s potential bailout were “only halfway through”. |
| She said the Washington-based Fund was still considering whether to join the Greek bailout, adding “we are not there yet”. | She said the Washington-based Fund was still considering whether to join the Greek bailout, adding “we are not there yet”. |
| Christine Lagarde has used a speech in Brussels to criticise Donald Trump’s protectionist stance. | Christine Lagarde has used a speech in Brussels to criticise Donald Trump’s protectionist stance. |
| The managing director of the International Monetary Fund said that putting up trade barriers would amount to a “self-inflicted wound” for the global economy. | The managing director of the International Monetary Fund said that putting up trade barriers would amount to a “self-inflicted wound” for the global economy. |
| More recently, we worked together to ensure that the great recession did not become another Great Depression. Cooperation through a multilateral framework has benefited every country. Fostering more resilient growth therefore requires more international cooperation – not less. | More recently, we worked together to ensure that the great recession did not become another Great Depression. Cooperation through a multilateral framework has benefited every country. Fostering more resilient growth therefore requires more international cooperation – not less. |
| Restricting trade would be a self-inflicted wound that disrupts supply chains, hurts global output, and inflates the prices of production materials and consumer goods. And low-income households are hurt the most as they consume the largest part of their incomes. | Restricting trade would be a self-inflicted wound that disrupts supply chains, hurts global output, and inflates the prices of production materials and consumer goods. And low-income households are hurt the most as they consume the largest part of their incomes. |
| Read the full story here: | Read the full story here: |
| The graphic below shows how inflation outpaced regular pay growth (excluding bonuses) in February: | The graphic below shows how inflation outpaced regular pay growth (excluding bonuses) in February: |
| Frances O’Grady, general secretary of the TUC, has called on the Prime Minister to “act urgently” to avoid a new living standards crisis. | Frances O’Grady, general secretary of the TUC, has called on the Prime Minister to “act urgently” to avoid a new living standards crisis. |
| She said: | She said: |
| Pay packets are taking a hammering from rising inflation and falling wage growth. We now need urgent action to stop another living standards crisis. Working people will want to know when Theresa May is going to do something to help. | Pay packets are taking a hammering from rising inflation and falling wage growth. We now need urgent action to stop another living standards crisis. Working people will want to know when Theresa May is going to do something to help. |
| We need more investment in skills and infrastructure to build strong foundations for better paid jobs. And it’s time to scrap the pay restrictions hitting midwives, teachers and other public servants. | We need more investment in skills and infrastructure to build strong foundations for better paid jobs. And it’s time to scrap the pay restrictions hitting midwives, teachers and other public servants. |
| John Philpott, labour market expert and director of the Jobs Economist, says Britain’s unemployment rate could fall further. | John Philpott, labour market expert and director of the Jobs Economist, says Britain’s unemployment rate could fall further. |
| A joint record employment rate of 74.6%, an unemployment rate at a 42-year low of 4.7% and almost zero (0.1%) growth in real average weekly earnings illustrates a remarkable structural change in the operation of the UK labour market compared with earlier decades. | A joint record employment rate of 74.6%, an unemployment rate at a 42-year low of 4.7% and almost zero (0.1%) growth in real average weekly earnings illustrates a remarkable structural change in the operation of the UK labour market compared with earlier decades. |
| This particular combination of jobs and pay suggests that the unemployment rate could fall much further, perhaps below 4%, without triggering troublesome pay inflation. | This particular combination of jobs and pay suggests that the unemployment rate could fall much further, perhaps below 4%, without triggering troublesome pay inflation. |
| While the effect of Brexit uncertainty on the demand side of the economy might yet result in a temporary rise in unemployment later this year, full employment is now a more realistic prospect for the UK than at any time since the early 1970s. | While the effect of Brexit uncertainty on the demand side of the economy might yet result in a temporary rise in unemployment later this year, full employment is now a more realistic prospect for the UK than at any time since the early 1970s. |
| Business lobby group the CBI has responded to the jobs and wages data. Rachel Smith, principal labour market economist, says: | Business lobby group the CBI has responded to the jobs and wages data. Rachel Smith, principal labour market economist, says: |
| It’s good to see more people in work, and with the level of vacancies the highest on record, access to the right skills remains a key challenge. | It’s good to see more people in work, and with the level of vacancies the highest on record, access to the right skills remains a key challenge. |
| With inflation rising, real pay growth has fallen back for the third month in a row now. This remains a concern, so it’s vital that productivity increases if we are to see earnings head up. | With inflation rising, real pay growth has fallen back for the third month in a row now. This remains a concern, so it’s vital that productivity increases if we are to see earnings head up. |
| Developing a modern industrial strategy, making the most of a skilled workforce that delivers across the UK, will be key to helping firms give productivity a meaningful boost. | Developing a modern industrial strategy, making the most of a skilled workforce that delivers across the UK, will be key to helping firms give productivity a meaningful boost. |
| Here is a summary of the main points in the ONS report on the labour market: | Here is a summary of the main points in the ONS report on the labour market: |
| Regular pay excluding bonuses grew by 2.2% in the three months to February 2017, compared with the three months to February 2016. This was lower than the 2.4% growth in the three months to January. | Regular pay excluding bonuses grew by 2.2% in the three months to February 2017, compared with the three months to February 2016. This was lower than the 2.4% growth in the three months to January. |
| Total pay including bonuses grew by 2.3% over the same period, unchanged from the previous three months. | Total pay including bonuses grew by 2.3% over the same period, unchanged from the previous three months. |
| Britain’s unemployment rate remained at 4.7%. The jobless rate was last lower in June to August 1975. | Britain’s unemployment rate remained at 4.7%. The jobless rate was last lower in June to August 1975. |
| The number of unemployed people in Britain fell by 45,000 to 1.56m. | The number of unemployed people in Britain fell by 45,000 to 1.56m. |
| There were 31.84 million people in work in the three months to February, 39,000 more than for September to November 2016. | There were 31.84 million people in work in the three months to February, 39,000 more than for September to November 2016. |
| Britain’s employment rate was 74.6%, the joint highest since comparable records began in 1971. | Britain’s employment rate was 74.6%, the joint highest since comparable records began in 1971. |
| The Resolution Foundation has analysed the ONS figures and says real pay is falling in sectors representing 40% of the workforce. | The Resolution Foundation has analysed the ONS figures and says real pay is falling in sectors representing 40% of the workforce. |
| Stephen Clarke, economic analyst at the thinktank, says: | Stephen Clarke, economic analyst at the thinktank, says: |
| Britain’s brief pay recovery has come to an end. Forty per cent of the workforce are experiencing shrinking pay packets according to the latest figures, in sectors ranging from accommodation to finance and the public sector. Many more will join them in the coming months as inflation continues to rise, with pay across the economy as a whole set to have fallen in the first three months of 2017. | Britain’s brief pay recovery has come to an end. Forty per cent of the workforce are experiencing shrinking pay packets according to the latest figures, in sectors ranging from accommodation to finance and the public sector. Many more will join them in the coming months as inflation continues to rise, with pay across the economy as a whole set to have fallen in the first three months of 2017. |
| While the National Living Wage is protecting the lowest earners from this squeeze, boosting wages across the rest of the economy is the big living standards challenge of this parliament. | While the National Living Wage is protecting the lowest earners from this squeeze, boosting wages across the rest of the economy is the big living standards challenge of this parliament. |
| Taking the month of February alone (the ONS prefers to use a three-month rolling average), regular pay growth excluding bonuses was just 1.9%, well below the 2.3% inflation rate. | Taking the month of February alone (the ONS prefers to use a three-month rolling average), regular pay growth excluding bonuses was just 1.9%, well below the 2.3% inflation rate. |
| It was a different for those receiving a bonus however. Average total pay including bonuses increasing by 2.9%, significantly outpacing inflation. The bonus season tends to run from December to April according to the ONS. | It was a different for those receiving a bonus however. Average total pay including bonuses increasing by 2.9%, significantly outpacing inflation. The bonus season tends to run from December to April according to the ONS. |