Employment News: UK Jobs Growth Stalled, but Pay Rises

Employment News: UK Jobs Growth Stalled, but Pay Rises

According to the latest figures in employment in the UK, for the second month in a row running jobs growth has stalled in Britain, but pay is rising solidly and productivity might finally be starting to recover.

For the past year KennedyPearce’s UK employment news updates has shown that employment has been slowly but surely rising in the UK, with concerns over pay. Around this time last year we posted about how UK employment rises yet wages fail to budge. In July 2014 the ONS reported that despite a rise in employment, wages remained stubbornly below inflation during the recovery. Excluding bonuses, average earnings growth slipped to 0.7 per cent, down from 0.9 per cent, whereas consumer price inflation rose to 1.5 per cent in May. However compared with the situation now in August 2015, the situation for UK employment seems to have flipped.

The Financial Times reported that Annual regular pay growth was unchanged at 2.8 per cent. Coupled with zero inflation, this gives workers the best real-terms boost since 2007. Total pay growth slowed from 3.2 to 2.4 per cent because of a drop in volatile bonus payments.

Michael Martins, economic analyst at the Institute of Directors, believes that the latest figures in employment should be something to celebrate. The Financial Times quoted Martins as saying “After years when preserving — and then creating — jobs was the main priority, businesses are now rewarding employees who cut down on hours or accepted pay freezes with extra work and higher wages,”[…] The slight decrease in the overall number of people in work is a natural part of this transition from a fragile recovery to a strong, growing economy.”

Interestingly the latest report shows that the biggest average pay rise was in the finance sector, with the typically low-pay retail and hotel sectors not far behind.

Chancellor, George Osbourne, has promised another 2m jobs by 2020, to lift the employment rate to 76.6 per cent, the highest in the G7 group of rich countries. However despite Osbourne’s bold claim, economists say this goal looks unrealistic.

It seems that employment data for the last quarter 2015 will be scrutinised and examined with close attention being paid to pay rise/wages and productivity. The results of the upcoming quarter will be a precedent to how the UK enters 2016.

Feature Image Courtesy of Independent Blogs, UK.

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