Wage growth and job vacancies stall
By Cat Hage | 16th January 2024
The Office of National Statistics has reported that wage growth in the UK jobs market slowed again but is still outpacing price rises.
According to official figures, pay growth, average regular earnings excluding bonuses, fell from 7.3% to 6.6% in the three months to November, marking a drop from the revised 7.2% in the previous three months.
Unemployment stayed the same at 4.2%
This indication of stalling in the jobs market saw the number of vacancies from October to December 2023 fall by 49,000 to 934,000, compared to the previous quarter. This drop was the 18th consecutive fall where the main sectors affected included wholesale and retail trade, motor vehicles, and transport and storage. These levels are still above pre-pandemic levels.
Retailers had reported the sharpest fall in vacancies despite the sector heading towards the key Christmas trading period.
Grant Fitzner, chief economist at the ONS, told the BBC's Today programme there were signs the labour market had been "softening somewhat in recent months", adding that the number of employers or businesses reporting recruitment difficulties had "fallen significantly over the past year".
The ONS said annual public sector pay growth (6.6%) in the three months to November last year overtook wage rises in the private sector (6.5%) for the first time since March 2021.
Overall pay growth peaked at 7.9% in the three months to August last year, the highest it has been for "several decades", according to ONS's Grant Fitzner.
While inflation has fallen sharply some economists have suggested the Bank could cut interest rates soon as wage growth is outpacing price rises.
The current inflation rate is at 3.9%, almost double the Bank of England's 2% target.
Jeremy Hunt, the chancellor, said with inflation falling it was "heartening to see real wages growing for the fifth month in a row".
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