UK unemployment at lowest rate in six years
13 August 2014
The unemployment rate fell to 6.4% in Q2 2014, the lowest since late 2008.
Wed, 13 Aug 2014The unemployment rate fell to 6.4% in Q2 2014, the lowest since late 2008.
The number of people in work increased by 167,000 on the previous quarter and up 820,000 on the previous year to reach 30.60 million, according to today’s Office for National Statistics bulletin.
However, wage growth is weak. Pay including bonuses was 0.2% lower than in the same period in the previous year.
The ONS said this “was mainly due to an unusually high growth rate for April 2013 as some employers who usually paid bonuses in March paid them in April last year”.
Pay excluding bonuses was 0.6% higher than it was a year earlier. Rises in both wages and bonuses remain below inflation, which means that pay has fallen in real terms.
Ian Temple, chairman of professional and technical staffing firm Hydrogen, said: “Although unemployment on an annual basis is falling, this is not yet having an impact on wage inflation. Additionally, the introduction of bonus caps is hindering wage growth. Despite an increased availability of jobs, at this point people are placing less emphasis on increased remuneration and more on simply securing a role.”
Temple added that demand for talent in areas such as legal, financial services, energy and pharmaceuticals had led to a reduced supply of talent and candidates negotiating increased packages and competitive counter offers.
Ian Brinkley, chief economist at Lancaster University’s Work Foundation, said: “We have strong employment numbers, a significant drop in unemployment and a sharp fall in the number of people in part time jobs who say they would like full time work – which suggests the recovery is at last making inroads into under-unemployment.
“But the wage data is dismal. It is hard to see where the pay revival is going to come from – and, until real wages start to grow again, it will not feel like much of a recovery to most people in work.”
The number of people in work increased by 167,000 on the previous quarter and up 820,000 on the previous year to reach 30.60 million, according to today’s Office for National Statistics bulletin.
However, wage growth is weak. Pay including bonuses was 0.2% lower than in the same period in the previous year.
The ONS said this “was mainly due to an unusually high growth rate for April 2013 as some employers who usually paid bonuses in March paid them in April last year”.
Pay excluding bonuses was 0.6% higher than it was a year earlier. Rises in both wages and bonuses remain below inflation, which means that pay has fallen in real terms.
Ian Temple, chairman of professional and technical staffing firm Hydrogen, said: “Although unemployment on an annual basis is falling, this is not yet having an impact on wage inflation. Additionally, the introduction of bonus caps is hindering wage growth. Despite an increased availability of jobs, at this point people are placing less emphasis on increased remuneration and more on simply securing a role.”
Temple added that demand for talent in areas such as legal, financial services, energy and pharmaceuticals had led to a reduced supply of talent and candidates negotiating increased packages and competitive counter offers.
Ian Brinkley, chief economist at Lancaster University’s Work Foundation, said: “We have strong employment numbers, a significant drop in unemployment and a sharp fall in the number of people in part time jobs who say they would like full time work – which suggests the recovery is at last making inroads into under-unemployment.
“But the wage data is dismal. It is hard to see where the pay revival is going to come from – and, until real wages start to grow again, it will not feel like much of a recovery to most people in work.”
