UK Labour Market Update: Unemployment Rate Fallen to 3.8% and Biggest Drop in Real Wage Pay Since 2013

Last month the UK saw a rise of 35,000 more staff on businesses’ payroll, however this boost in employment is set to be short-lived with the current cost of living crisis, labour demand is set to decline and people’s wages aren’t keeping up with the accelerating rate of inflation.

Read more below…

 


UNEMPLOYMENT RATE

The UK unemployment rate has fallen to a new low of 3.8%, returning back to unemployment rates seen in pre-pandemic 2019. Unemployment levels have not been lower than 3.8% since December 1974. The drop in unemployment could be a result of the current rise of inflation and cost of living, due to soaring energy bills and transport costs since Russia’s invasion of Ukraine. According to the Government’s budget forecasters, British households are likely to suffer the biggest hit to their living standards since the 1950’s, as they believe inflation could reach almost 9% later in the year.

 

There is now one vacancy for every unemployed person, which is the first time since the data began in the early 2,000’s that this milestone has been reached: 

 

Source: https://think.ing.com

 


LABOUR MARKET

Despite jobs hitting a high of 1.3 million in the months of January to March 2022, the 50,000 jobs increase in the month of February was the smallest rise seen in nearly a year. We are expected to see a reduced demand for staff and softer economic growth due to concerns that the surging inflation will slow the economy this year. Last month, British retailers reported weaker annual sales growth, as a result of a reduction in consumer spending due to rising costs.

 


WAGES

“Latest inflation figures show the cost of living is rising at its fastest pace for 30 years.”

– BBC News

 

Wages are failing to keep up with the accelerating rise of inflation, despite the 6.6% increase to the National Minimum Wage for workers aged 23+yrs on April 1st 2022. In February alone, real regular wages saw the biggest drop since August 2013 of 2.1%. It has been said that households could be £900 worse off this year as the growth of wages are lagging behind the soaring shop prices and Ministers have been warned that energy bills are likely to rise by another £500 in October.

 


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As of April 2022, 65% of our current roles pay above the NMW. Search these roles in your local area:

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