UK Wage Growth Slows to Lowest Level in Over Two Years, Reports ONS
The Office for National Statistics (ONS) has revealed that average regular earnings growth in the UK has dropped to 4.9% in the three months leading up to July, down from the previous quarter’s 5.1%. This marks the lowest level seen since June 2022, indicating a concerning trend in the job market.
Despite the decline, wages are still outpacing inflation, with pay rising by 2.6% in the three months to August when factoring in Consumer Prices Index inflation. However, the latest ONS data also highlights a decrease in job vacancies, plummeting by 34,000 to 841,000 in the quarter ending in September – the lowest level recorded since March to May 2021.
Moreover, the number of workers on payrolls in the UK saw a decline of 35,000 between July and August, painting a grim picture of the current employment landscape. On a slightly more positive note, the UK unemployment rate unexpectedly dropped to 4% in the three months leading to August, down from 4.1% in the previous quarter. However, the ONS urges caution in interpreting this decline due to a low response rate in its jobs survey.
David Freeman, the head of the ONS labour market and household division, commented on the findings, stating that the slowdown in pay growth can be attributed to one-off payments made to many public sector workers last year. He noted that earnings are still increasing at a faster rate than inflation. Vacancies across various industries have witnessed a decline, adding to the concerns of a weakening job market.
The data provided by the ONS underscores the challenges faced by the UK economy, with wage growth hitting a new low amidst ongoing uncertainties. The fluctuating job market, coupled with the persisting impact of the global pandemic, poses significant hurdles for both employees and employers across the country.