Wage growth in the UK experienced a slight decrease during the summer months, coinciding with a minor uptick in unemployment rates. According to new data from the Office for National Statistics (ONS), annual growth in average earnings for employees was recorded at 4.7% for the three-month period ending in August, a decrease from 4.8% in July. Correspondingly, the national unemployment rate rose from 4.7% to 4.8%. The ONS has indicated that this unemployment rate should be interpreted cautiously, as they are addressing concerns regarding data quality.
Liz McKeown, director of economic statistics at the ONS, noted that there are indications of stabilization in hiring activity, despite a prolonged period of weak hiring. She highlighted that the rise in unemployment was primarily influenced by younger individuals. While there was a quarterly decline in economic inactivity among students and retirees, this was counterbalanced by an uptick in inactivity due to long-term illness and other unspecified reasons.
In the private sector, earnings growth was observed at its lowest level in four years but remained above inflation rates. For the public sector, annual growth in average earnings reached 6%, while the figure for the private sector was 4.4%. Chris Hare, a senior UK economist at HSBC, characterized the labor market as fairly steady, suggesting that current labor demand appears soft, which may lead to a gradual decline in cost pressures and wage growth.
The ONS revised its earlier estimate of wage growth, updating it from 4.7% to 4.8%. This revised figure is anticipated to be relevant in determining adjustments to the state pension under the triple lock policy, which aligns increases with the highest of wage growth, inflation, or a minimum of 2.5%. Presently, inflation stands at 4.1%.
Source: https://www.bbc.com/news/articles/cjek274q99xo?at_medium=RSS&at_campaign=rss