UK Labour Market Remains ‘Broadly Stable’ as Wage Growth Decelerates
The growth in wages has weakened and the job market has been stalling, but employment data has revealed a welcomed increase on the quarter.
The annual growth of regular pay in the UK has fallen sharply, amid dropping number of vacancies and an unchanged rate of unemployment.
The Office for National Statistics (ONS) said that the average weekly wages, including bonuses, were at 6.5 percent.
The figures showed it to be the lowest rate since the three months to January last year and one of the steepest falls in wage growth since the COVID-19 pandemic.
“This is on top of the record cut to national insurance worth nearly £1,000 in a typical household with two working people, putting more money in their pockets,” the chancellor added.
Tuesday figures also showed that the public sector enjoyed a slightly higher wage growth (6.6 percent) than the private sector with 6.5 percent.
The largest annual regular pay growth rate of 7.2 percent was recorded in the wholesaling, retailing, hotels and restaurants sectors.
Vacancies
Employment indicators showed a decrease in the number of job vacancies over the three months to Dec. 2023, settling at 934,000 vacancies.
When compared to the levels of a year ago, the October to December period saw a slowdown in the total number of vacancies, down by 226,000. However, the number remained 133,000 above their pre-COVID-19 January to March 2020 levels.
Wholesale and retail showed the largest quarterly drops in the number of job vacancies despite it being the usually busy pre-Christmas period.
Employment
Commenting on the employment figures, the ONS’s director of economic statistics Liz McKeown said that the overall picture was “broadly stable.”
“While annual pay growth remains high in cash terms, we continue to see signs that wage pressures might be easing overall,” she added.
The secretary of state for work and pensions, Mel Stride, has welcomed the labour market data.
Labour officials disagreed, with the shadow minister Alison McGovern arguing that employment figures are nowhere near where they should be.
Economists have predicted a continued fall in annual pay growth early in 2024, which is expected to stop fuelling fuel inflation.
PA contributed to this report.