According to the BBC, the latest official data show that wage growth in Britain has slowed down and the job market has shown signs of stagnation. In the three months to October, the salary growth excluding bonuses slowed down to 7.3%, while the number of job vacancies decreased, and the number of employed people decreased, by 45,000 from September to November. However, although the income growth rate is not as fast as before, it still exceeds inflation, which shows that the Bank of England is unlikely to cut interest rates in the short term.
Darren Morgan, director of economic statistics at the National Bureau of Statistics, who released these data, said: “This is the longest period of decline on record, which is longer than the period after the 2008 economic recession.” This is the 17th consecutive month that the number has dropped, and the total number of vacancies is 949,000. Morgan said that “it is still far higher than the level before the pandemic”.
Kate Stephens, CEO of a charity that helps women find jobs, said that the market has changed and people are finding jobs for longer and longer. “They have to apply for more jobs. In fact, people feel a little overqualified for some jobs they actually want to change,” she said. “I think this is largely caused by the cost of living crisis. People want to find a job because they want income security, but this is not necessarily the job they may choose. ”
Yael Selfin, chief economist of KPMG, said: “Although the momentum has weakened, the labor market is still tense. According to the latest data from the National Bureau of Statistics, the unemployment rate in Britain remains at 4.2%. However, the Bank of England and other institutions predict that the unemployment rate will be as high as 5% in the next few years, which may mean the loss of hundreds of thousands of jobs.
It is against this challenging background that the government’s “return to work” plan is being launched. Their aim is to get more people employed, not just the unemployed. Unlike other rich countries, hundreds of thousands of people in Britain are classified as “inactive” compared with before the Covid-19 pandemic, and they are neither looking for jobs nor suitable for work. But if there are fewer jobs available, it will be difficult to find a job.
But for those who are already working, there is still a glimmer of hope. With the rising interest rate slowing down the price increase, the wage growth rate is exceeding the inflation rate at the fastest rate in more than two years. This means a further increase in household budgets, but it also highlights economists’ expectations that interest rates will not fall soon, as the Bank of England warned. In response to the latest data, British Chancellor of the Exchequer Jeremy Hunt said that “inflation continues to decline and real wage growth is positive”. However, Liz Kendall, the minister of pensions, said that Britain was “the only country in the G-7 where the employment rate has not returned to the pre-epidemic level”.
Post time: Dec-15-2023