UK Employment continues to sit at a record high, despite households feeling the pinch as inflation exceeds pay rises. The employment rate has now reached 74.8% in the quarter to April 2017. However, typical earnings have dropped by 0.4% due to a hike in prices.
These latest government figures do suggest that the job market is holding up despite the country’s Brexit vote. The figures do highlight the impact of the fall in the value of the pound, which is the biggest drop since July to September 2014.
Excluding inflation, wages rose by the equivalent of 2.1% in the three months to April, which is a slowdown from 2.3% in the first quarter. The Office for National Statistics reviewed its data for wages, in order to improve its calculations for small business earnings. This saw lower estimates for wage levels but little change overall to growth rates. Not including bonuses, token earnings went up by 1.7% year-on-year, the lowest rise since January 2015.
The Bank of England intends to keep a close eye on wage growth. It wants to see whether the inflation increase is creating a longer-lasting burden on prices. It predicts earnings to rise by 2% this year before climbing again in 2018 and 2019. However, the central bank says that because there’s such little pressure on employers to increase pay, it could lead to a more long-lasting inflation issue.
European employment rises 1.4% to hit record levels
Meanwhile, employment has reached record levels across Europe. Between January and March this year, 234.2m people were employed across the EU. And from this, 154.8m were in the eurozone area, according to the Statistics agency Eurostat.
In the EU and eurozone, employment increased by 0.4%, compared with October to December last year. And also in comparison to last year, 1.5% more people in the countries using the single currency were in work. Despite strong job figures, other data revealed a slowdown in industrial production, rising by 1.4% in the eurozone and EU. This compares with a 2.2% increase in March. These figures look promising for the bloc’s economic growth for the second quarter, after an 0.6% rise during January to March this year.
An article by HR Solutions, providers of practical HR advice