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| UK wage squeeze continues, as jobless rate remains at 42-year low – business live | UK wage squeeze continues, as jobless rate remains at 42-year low – business live |
| (35 minutes later) | |
| 11.17am BST | |
| 11:17 | |
| Revealed: Who's suffering worst from the pay squeeze | |
| Estate agents and hairdressers are suffering some of the tightest wage squeezes, today’s report shows. | |
| City workers, administrators and IT staff, though, are getting inflation-beating pay packets: | |
| (this shows real wages - so pay minus inflation) | |
| Updated | |
| at 11.42am BST | |
| 11.01am BST | 11.01am BST |
| 11:01 | 11:01 |
| Britain’s employment rate has fallen back from its record high. | Britain’s employment rate has fallen back from its record high. |
| The proportion of 16-64 year olds in work dipped to 75.1% in the three months to August, down from 75.3% a month ago. | The proportion of 16-64 year olds in work dipped to 75.1% in the three months to August, down from 75.3% a month ago. |
| The employment rate had been rising steadily since the end of 2011, as Britain clawed its way back from the financial crisis. | The employment rate had been rising steadily since the end of 2011, as Britain clawed its way back from the financial crisis. |
| Now, it’s very plausible that last month’s small fall is only a blip. | Now, it’s very plausible that last month’s small fall is only a blip. |
| But, it could be a sign that the labour market has peaked..... | But, it could be a sign that the labour market has peaked..... |
| Sarah O’Connor, the FT’s employment correspondent, tweets: | Sarah O’Connor, the FT’s employment correspondent, tweets: |
| Probably just a blip, this small dip in the employment rate, but one to watch.... pic.twitter.com/WYXTVKFXwd | Probably just a blip, this small dip in the employment rate, but one to watch.... pic.twitter.com/WYXTVKFXwd |
| 10.46am BST | 10.46am BST |
| 10:46 | 10:46 |
| Here are more figures from the Resolution Foundation, showing how the wage squeeze will intensify in the run-up to Christmas. | Here are more figures from the Resolution Foundation, showing how the wage squeeze will intensify in the run-up to Christmas. |
| Latest RF pay projection following average earnings figures today and inflation yesterday - pay squeeze set to deepen in the coming months pic.twitter.com/FWsB2Cc1tG | Latest RF pay projection following average earnings figures today and inflation yesterday - pay squeeze set to deepen in the coming months pic.twitter.com/FWsB2Cc1tG |
| 10.41am BST | 10.41am BST |
| 10:41 | 10:41 |
| A handy breakdown of the UK labour market: | A handy breakdown of the UK labour market: |
| 32.10m people in work and 1.44m unemployed people for Jun-Aug 2017 pic.twitter.com/OZ0gPvMYok | 32.10m people in work and 1.44m unemployed people for Jun-Aug 2017 pic.twitter.com/OZ0gPvMYok |
| 10.39am BST | 10.39am BST |
| 10:39 | 10:39 |
| Unemployment: the key charts | Unemployment: the key charts |
| This graph shows how UK unemployment fell to 4.3% in the last quarter. | This graph shows how UK unemployment fell to 4.3% in the last quarter. |
| There are now 1.44 million unemployed people in the UK, down 215,000 in the last year. | There are now 1.44 million unemployed people in the UK, down 215,000 in the last year. |
| The jobless rate hasn’t been lower since since Harold Wilson was prime minister. | The jobless rate hasn’t been lower since since Harold Wilson was prime minister. |
| This chart shows how wage growth slowed at the start of this year, and hasn’t recovered strongly since. | This chart shows how wage growth slowed at the start of this year, and hasn’t recovered strongly since. |
| An extra 420,000 jobs have been created in the last year -- this chart shows the key changes: | An extra 420,000 jobs have been created in the last year -- this chart shows the key changes: |
| 10.26am BST | 10.26am BST |
| 10:26 | 10:26 |
| Britain’s bosses (the men and women with their hands on the purse strings) argue that productivity needs to rise so they can deliver wage increases. | Britain’s bosses (the men and women with their hands on the purse strings) argue that productivity needs to rise so they can deliver wage increases. |
| Matthew Percival, CBI Head of Employment, says the government can, and must, help: | Matthew Percival, CBI Head of Employment, says the government can, and must, help: |
| “Persistently weak productivity, coupled with falling real wages, continues to hit living standards, underlining the need for the Chancellor to bold in his Budget. | “Persistently weak productivity, coupled with falling real wages, continues to hit living standards, underlining the need for the Chancellor to bold in his Budget. |
| “Delivering urgent progress on large and small infrastructure projects, addressing underfunding in education and providing practical support for innovators are all steps the Government can take as part of a meaningful Industrial Strategy to boost productivity, the only sustainable route to improving people’s pay.” | “Delivering urgent progress on large and small infrastructure projects, addressing underfunding in education and providing practical support for innovators are all steps the Government can take as part of a meaningful Industrial Strategy to boost productivity, the only sustainable route to improving people’s pay.” |
| Updated | Updated |
| at 10.27am BST | at 10.27am BST |
| 10.23am BST | 10.23am BST |
| 10:23 | 10:23 |
| Resolution: Average pay is back at 2006 levels | Resolution: Average pay is back at 2006 levels |
| The Resolution Foundation have spotted that average earnings (adjusted for inflation) are no higher than they were back in February 2006, thanks to this latest slump in real wages. | The Resolution Foundation have spotted that average earnings (adjusted for inflation) are no higher than they were back in February 2006, thanks to this latest slump in real wages. |
| Stephen Clarke, their economic analyst, explains: | Stephen Clarke, their economic analyst, explains: |
| “Today’s figures confirm the big picture trend that the UK labour market is great at creating jobs, but terrible at raising people’s pay. | “Today’s figures confirm the big picture trend that the UK labour market is great at creating jobs, but terrible at raising people’s pay. |
| “The scale of the pay squeeze over the last decade is so vast that people today are earning no more than they did back in February 2006, despite the economy being 4.4 per cent bigger per person since then.” | “The scale of the pay squeeze over the last decade is so vast that people today are earning no more than they did back in February 2006, despite the economy being 4.4 per cent bigger per person since then.” |
| Britons would need a £15 per week pay rise to get back to the levels before the financial crisis. | Britons would need a £15 per week pay rise to get back to the levels before the financial crisis. |
| Average pay falls back to February 2006 levels as jobs market holds steady @stephenlclarke on today's @ONS figures https://t.co/gpxpypjetP pic.twitter.com/mD9HeIrklT | Average pay falls back to February 2006 levels as jobs market holds steady @stephenlclarke on today's @ONS figures https://t.co/gpxpypjetP pic.twitter.com/mD9HeIrklT |
| 10.17am BST | 10.17am BST |
| 10:17 | 10:17 |
| Geraint Johnes, professor of Economics at Lancaster University Management School, has spotted that workers in the financial sector are getting decent enough pay rises.... | Geraint Johnes, professor of Economics at Lancaster University Management School, has spotted that workers in the financial sector are getting decent enough pay rises.... |
| The 3 month average measure of total pay growth indicates that earnings have risen by 2.2% over the last year. This represents no change on the previous month. There has been some acceleration in pay in the financial and business services (where pay growth is now 2.7%, or, on the less reliable single-month measure, 3.1%). | The 3 month average measure of total pay growth indicates that earnings have risen by 2.2% over the last year. This represents no change on the previous month. There has been some acceleration in pay in the financial and business services (where pay growth is now 2.7%, or, on the less reliable single-month measure, 3.1%). |
| But in many industries – including the public sector, manufacturing, construction and distribution – pay growth is still below 2%. This does not suggest that it is yet time for the Bank of England to be hiking interest rates.” | But in many industries – including the public sector, manufacturing, construction and distribution – pay growth is still below 2%. This does not suggest that it is yet time for the Bank of England to be hiking interest rates.” |
| 10.12am BST | 10.12am BST |
| 10:12 | 10:12 |
| Jeremy Cook, Chief Economist at WorldFirst, fears that UK unemployment will soon start to rise. | Jeremy Cook, Chief Economist at WorldFirst, fears that UK unemployment will soon start to rise. |
| He argues that the wage squeeze means consumers will spend less in the shops, hitting profits and forcing firms to lay off staff (creating something of a vicious circle...) | He argues that the wage squeeze means consumers will spend less in the shops, hitting profits and forcing firms to lay off staff (creating something of a vicious circle...) |
| He writes: | He writes: |
| “The story of the labour market remains the same: more people earning weaker wages. These figures do nothing to change our belief that a lack of real wage gains are going to continue to impinge on the ability of consumers to remain the driving force of UK growth. | “The story of the labour market remains the same: more people earning weaker wages. These figures do nothing to change our belief that a lack of real wage gains are going to continue to impinge on the ability of consumers to remain the driving force of UK growth. |
| “The pace of price increases is at a near-term high and the next few months may also mark the peak of employment. UK businesses, particularly those who import from abroad or are part of global supply chains, have laboured under a slowing economy and higher costs courtesy of the falling pound. Should neither consumption or investment provide these companies – particularly retailers - with a strong Christmas, then we would expect to see the ‘good’ news of falling unemployment start to reverse as businesses react to lost margins cutting into the corporate bone.” | “The pace of price increases is at a near-term high and the next few months may also mark the peak of employment. UK businesses, particularly those who import from abroad or are part of global supply chains, have laboured under a slowing economy and higher costs courtesy of the falling pound. Should neither consumption or investment provide these companies – particularly retailers - with a strong Christmas, then we would expect to see the ‘good’ news of falling unemployment start to reverse as businesses react to lost margins cutting into the corporate bone.” |
| 10.07am BST | 10.07am BST |
| 10:07 | 10:07 |
| ING: Pay squeeze will continue | ING: Pay squeeze will continue |
| Real wages will probably keep shrinking for many more months, warns James Smith of ING: | Real wages will probably keep shrinking for many more months, warns James Smith of ING: |
| Crunching the numbers, we don’t expect wage growth to go much above 2.1% or 2.2% before next summer. | Crunching the numbers, we don’t expect wage growth to go much above 2.1% or 2.2% before next summer. |
| So whilst we expect headline inflation to peak at 3.1% next month, the gap between CPI and wage growth is likely to stay fairly wide for some time to come. | So whilst we expect headline inflation to peak at 3.1% next month, the gap between CPI and wage growth is likely to stay fairly wide for some time to come. |
| 10.06am BST | 10.06am BST |
| 10:06 | 10:06 |
| Maike Currie, investment director for Personal Investing at Fidelity International, says the rise of the ‘gig’ economy, and the government’s public sector pay cap, are partly to blame for the wage squeeze. | Maike Currie, investment director for Personal Investing at Fidelity International, says the rise of the ‘gig’ economy, and the government’s public sector pay cap, are partly to blame for the wage squeeze. |
| “Another month, another fall in real household incomes. Today’s wage growth figures show our total earnings including bonuses grew at just 2.2% in the three months to August . With yesterday’s CPI figures showing inflation spiking to an eye watering 3%, the gap between our pay packets and the cost of goods and services continues to remain vast - our wages are not keeping up with the rising cost of living. | “Another month, another fall in real household incomes. Today’s wage growth figures show our total earnings including bonuses grew at just 2.2% in the three months to August . With yesterday’s CPI figures showing inflation spiking to an eye watering 3%, the gap between our pay packets and the cost of goods and services continues to remain vast - our wages are not keeping up with the rising cost of living. |
| “The absence of wage growth remains the missing piece of the puzzle in the UK’s slow road to recovery - high employment should be the worker’s best friend because that’s what pushes up wages. With UK unemployment at a 45-year low, one would think that workers’ bargaining power at the wage negotiation table would improve, yet earnings growth remains elusive and the UK’s workforce is getting poorer. There are many potential reasons for this ranging from poor productivity to the squeeze on public sector pay and the rise of self-employment in the so-called ‘gig economy’. | “The absence of wage growth remains the missing piece of the puzzle in the UK’s slow road to recovery - high employment should be the worker’s best friend because that’s what pushes up wages. With UK unemployment at a 45-year low, one would think that workers’ bargaining power at the wage negotiation table would improve, yet earnings growth remains elusive and the UK’s workforce is getting poorer. There are many potential reasons for this ranging from poor productivity to the squeeze on public sector pay and the rise of self-employment in the so-called ‘gig economy’. |