- Written by Noor Nanji & Faisal Islam
- BBC News
Despite the rising unemployment rate, it is the first time in about two years that wage growth has caught up with inflation.
Regular salaries, excluding bonuses, rose 7.8% year-on-year from May to July, matching the pace of inflation over the same period.
Not everyone’s salary will increase that much. This figure is an average for the entire economy.
And there wasn’t much good news elsewhere. Unemployment rose and job openings fell again.
Overall, it’s a mixed image with lots of moving parts. Wages are no longer squeezed by inflation, but on average there are consistent signs that the job market is starting to “turn around.”
Darren Morgan, director of economics and statistics at the Office for National Statistics (ONS), who published the data, said that while revenues continued to rise rapidly, inflation, which measures the rate of increase in the price of goods and services, was lower than the baseline. He said he is doing so. High pitched.
“This means that people’s real wages will no longer fall,” he says.
However, the headline unemployment rate rose to 4.3% for the first time in almost two years, leaving the country with just under 1.5 million people. It rose by 0.5%, which is low by past standards.
Mr Morgan told the BBC’s Today program that the rise in unemployment was driven by men and people who have been out of work for up to six months.
“So people who are re-entering the job market after saying they’re out of work or unemployed are likely taking longer to find work compared to what we saw earlier this year. .”
At the same time, the number of job openings fell below 1 million. Rising interest rates are contributing to a slowdown in the job market. That is not yet reflected in wage reduction claims, but it will eventually be.
Bank of England hawks who want further interest rate hikes will focus on the record increase in profits on a cash basis (although using the Consumer Price Index measure, real profits flat at zero are unlikely) , it is important to note that this is still far from normal for the UK) (an index that was typically growing at 2% a year before the Great Financial Crisis).
Dovs, who probably think there’s enough upside for now, will focus on rising unemployment and falling job openings. Ahead of next Thursday’s decision, all eyes are on next week’s inflation statistics.
Responding to the latest figures, Prime Minister Jeremy Hunt said: “It’s encouraging to see that the number of people on the payroll remains near record highs and our unemployment rate is below that of many of our international peers.”
Wage growth “remains high”, he said, adding: “If real wages are to grow sustainably, we need to stick to our plan to halve inflation.”
But the most politically important figure revealed today is 8.5%, or the total increase in income on a cash basis, the number that will determine the rise in the state pension next April thanks to the triple lock. .
This is almost certain to be higher than next month’s inflation rate (about 7%), which is typically used to increase most benefits and tax credits.
The government is considering whether to save billions of dollars by using an even lower figure than next April’s. A decision is expected to be made by the autumn statement in November.
Joanne Martin works at LED designer and manufacturer Marl International in Ulverston, Cumbria, where some staff have received pay rises of up to 20%.
“It was a really nice change of pace,” she said. “I think sometimes you let off some stress from home, and having a little extra money definitely makes it less stressful.
“It’s less stressful at work because you don’t have to worry too much all the time. So it’s definitely a positive effect.”
Tips to increase your salary
- Choose the right time – Scheduling the conversation in advance gives you and your boss time to prepare, increasing the likelihood of a productive conversation.
- Bring proof – have a list of what you’ve accomplished at work and how you’ve developed yourself
- Be confident – know your worth and don’t be shy to speak up
- Keep the numbers in mind – look at job ads online to see salaries for comparable jobs
- Don’t give up. If it doesn’t work out this time, and you don’t get what you want again, be prepared to look elsewhere. Keep talking to your employer.
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