Latest job figures show the second largest drop in wage growth while unemployment and inflation remain at a 40-year high. As job vacancies are at an all-time low, the older population are going back to work to fight the rising cost of living.
On Monday, the Office for National Statistics (ONS) released its report revealing the dire state of the British economy. The country’s rate of unemployment rose 3.7% in the third quarter, up from 3.6% in the second quarter of this year. The data showed a 65,000 drop in the number of job vacancies between September and November to 1.9 million, which is the fifth quarterly fall in a row and the first annual fall since the beginning of last year.
To show clear effects of the cost of living crisis that has taken over households and business across the country, the ONS reported that wage growth was 4.2% weaker in November compared to 3.7% in the previous month. This is the second lowest recorded by the national statistics agency since April’s rate of 4.2% that was fueled by the sudden rise in inflation from the war in Ukraine. The figures also showed a rise in the number of people choosing to return to work, especially among the populus in their 50’s, to beat rising costs. Inactivity rate among Britons fell to 21.5%.
The ONS reported that regular wages, excluding incentives and bonuses, rose by 6.1% in the third quarter as companies are under increased pressure to raise payments to employees in order to keep in line with the rate of inflation which hit 11.1% – a 41 year high – in October. But once the Consumer Prices Index (CPI) is taken into account, wages have fallen by 3.9% which is reflected in the rising prices of energy, food and other daily items. However, inflation is expected to ease a little by dropping just below 11% this month.
Data also showed a clear divide between the private and public sector when it came to wage growth over the three month period leading to November. While payments in the private sector grew by 6.9%, public sector employees only saw a 2.7% rise in their wages. According to reports, 2022 was the UK’s worst year for real wage growth in almost fifty years. The widening pay gap has resulted in many public sector employees including delivery workers, nurses and rail workers taking industrial action demanding higher wages.
On Tuesday, members of the RMT union rejected a 9% pay-rise offered by Britain’s largest railways operator, Network Rail. The union has begun the first day of its series of 48-hour strikes leading up to Christmas Eve and New Years which will affect 80% of the services across the nation. Similarly, the Royal Mail workers union is also conducting strikes during the busiest period of the year demanding higher pay. Retail stores have asked Christmas shoppers to order early due to the ongoing delivery delays, a direct result of the protests, and the railway has asked commuters to travel only if it is absolutely necessary. The ONS reports that 417,000 working days were lost due to labour disputes in the last quarter, which is the highest since 2011 and is only expected to rise as the union strikes continue.
“To get the British economy back on track, we have a plan which will help to more than halve inflation next year – but that requires some difficult decisions now. Any action that risks embedding high prices into our economy will only prolong the pain for everyone, and stunt any prospect of long-term economic growth,” said Jeremy Hunt, the Chancellor of Exchequer.
The report also showed a 23,000 increase in the number of Britons that were unemployed, hitting 1.2 million in the last quarter. However, there was also a 27,000 rise in those that were employed, reaching 32.8 million by the end of November. Pay as you earn (PAYE) data showed that the number of workers on the country’s payrolls rose by 107,000 in the third quarter to reach 29.9 million.