Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

UK Unemployment Rate Rises Amidst Record Pay Growth

by August 15, 2023
August 15, 2023
UK Unemployment Rate Rises Amidst Record Pay Growth

The latest data from the Office for National Statistics (ONS) reveals that the unemployment level in the UK has experienced a slight increase.

The figures, covering the three months leading up to June, show that the unemployment rate rose to 4.2%, up from 3.9% in the previous quarter. This increase marks the highest unemployment rate since October 2021, surpassing pre-pandemic levels.

Record Pay Growth

Alongside the rise in unemployment, the ONS also reported record-breaking pay growth. Regular pay, which excludes bonuses, saw a significant increase of 7.8% compared to the same period last year. According to ONS statisticians, this represents the highest annual growth rate in regular pay since comparable records began in 2001. However, when adjusting for inflation (Consumer Prices Index including owner occupiers’ housing costs), real wages only rose by 0.1% for the year.

Impact on Workers

The surge in pay growth may initially seem like a positive development for workers, but it is essential to consider the impact of inflation. The Consumer Price Index, a key measure of inflation, stood at 7.9% in the year leading up to June. This means that the rate of price rises outpaced the growth in wages, resulting in an effective pay cut for many workers. It is worth noting that this is the first time since October 2021 that real wages have increased, indicating the ongoing struggle for workers to keep up with rising living costs.

Bank of England Concern

The governor of the Bank of England has expressed concerns about the sustainability of wage rises. The central bank has been attempting to combat inflation through a series of interest rate hikes. With 14 consecutive interest rate rises, the aim is to bring down inflation and stabilize the economy. However, the recent surge in pay growth may pose challenges to this goal, as it could further fuel inflationary pressures.

While private sector wage growth reached 8.2%, the public sector also experienced an increase in wages. Public sector wages rose by 6.2%, marking the highest increase since September to November 2001 when public sector pay grew by 5.7%. This increase in public sector wages reflects ongoing efforts to address wage disparities and ensure fair compensation for public sector workers.

The rise in the unemployment rate coupled with record pay growth presents a complex economic picture. On the one hand, the increase in wages indicates potential improvements in workers’ financial well-being. However, when considering the impact of inflation, the reality may be less promising. The challenge lies in striking a balance between wage growth and containing inflationary pressures.

Economists and policymakers will closely monitor these developments to gauge the sustainability of wage growth and its impact on the overall economy. It remains to be seen how the government and the Bank of England will navigate these challenges and ensure a stable economic environment for businesses and workers alike.

Sarah Loates, director of Derby-based Loates HR Consultancy: “It’s really tough in the jobs market right now and the rise in the unemployment rate is a real cause for concern. We’ve seen a slight uptick in redundancy enquiries, only a trickle at the moment, and we hope it doesn’t turn into a tsunami. Based on this evidence, things in the wider economy may be deteriorating faster than expected. SMEs are increasingly planning for worst-case scenarios, but we’re hoping they don’t have to enact their plans. Aside from ongoing recruitment challenges, we are also seeing employers struggling to shoulder the April National Minimum Wage and Living Wage increases, especially those in hospitality and retail, due to the volume of lower-paid workers. This is also causing a knock-on effect for leader-level roles in these sectors, as the gap between entry-level positions and team leaders is squeezed.”

Read more:
UK Unemployment Rate Rises Amidst Record Pay Growth

0
FacebookTwitterGoogle +Pinterest
previous post
The Decline of Threads App: A Promising Start Ends in Disappointment
next post
Market Research for Branding: How Insights Help Your Brand-Building

You may also like

UK braces for even higher bills as Norway...

August 9, 2022

Jungle murals for the wall as an idea...

December 30, 2022

Low Investment Blocking UK Growth, Says Think Tank

June 19, 2024

Taxpayers could lose £100m as HS2 land no...

October 20, 2023

South East leads in bank loans to small...

October 21, 2024

Over half of UK employees are forced back...

February 16, 2023

One-third of bosses shelve generative AI plans after...

April 8, 2024

The Rise of Mobile Gaming: How Smartphones Have...

January 3, 2025

How to Automatically Generate Captions: Simplifying Video Editing...

October 24, 2024

Magnificent seven lose $2.7 trillion as tech stocks...

March 14, 2025

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Trump ally stands firm against ‘big, beautiful bill’ despite pressure: ‘It’ll completely backfire’

      June 8, 2025
    • Rubio condemns assassination attempt on Colombian presidential candidate Miguel Uribe

      June 8, 2025
    • Obama WH physician says Biden doc should have performed cognitive test

      June 8, 2025
    • Trump warns of ‘serious consequences’ if Elon Musk funds Democrats

      June 7, 2025
    • Musk jokes about reconsidering stance on Big Beautiful Bill after Schiff’s praise

      June 7, 2025
    • Musk deletes explosive posts about Trump and Epstein files

      June 7, 2025

    Categories

    • Business (8,152)
    • Investing (2,019)
    • Politics (15,571)
    • Stocks (3,136)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved