Growing Money

Wage growth picks up as UK unemployment falls

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UK workers’ wages are on the rise, with figures from the Office for National Statistics showing an increase in average earnings (excluding bonuses) of 1.6% in the August to October period, compared to the previous year.

These results marked the first time in six years that both measures of earnings and growth have been above the inflation rate.

Fall in UK unemployment

However that is not the only good news we have to share. The latest reports from ONS also show that the number of unemployed people in the quarter fell by 63,000 to 1.96 million. The rate of unemployment is now at 6%, marking its lowest level in six years .
Figures from the Office for National Statistics highlighted that there were 30.80 million people in work during the three month period from August to October, which was 115,000 more people than for the May to July period, as a result of more people gaining full-time positions.

With more people in full time employment, it has meant that fewer people are now claiming Jobseeker’s Allowance. Figures released in November showed that the number of people claiming Job Seeker’s Allowance had decreased by 26,900 to 900,100.

A trend that is expected to continue

In October, we saw pay (including bonuses) increase by 1.8%, a higher rate of that of inflation, which was at 1.3% in the same month. The trend continued in November with inflation at 1% – the lowest it has been in twelve years.

According to policymakers at the Bank of England, this is a trend that is expected to continue in the foreseeable future. Speaking to BBC Radio 5 live, Deputy Governor of the Bank of England, Jon Cunliffe said that UK inflation in the coming months was going to be low. A number of analysts have also spoken positively about the figures, saying that they are very good news for consumers, especially in terms of purchasing power in 2015.

Still a long way to go…

Prime Minister David Cameron recently tweeted saying ‘Employment is at a record high & average earnings are rising faster than inflation. More to do, but our long term economic plan is working.

Shadow secretary for work and pensions, Rachel Reeves definitely agreed that although the figures were a good start, more needed to be done, particularly in terms of increasing long-term youth employment rates. Despite an overall fall in UK unemployment, long-term youth unemployment has risen over the last few months.

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Image Credit: Images_of_Money

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