Official figures reveal that wage growth in the UK’s jobs market is still outstripping price rises, but it has slowed slightly in recent months. The data published by the Office for National Statistics (ONS) indicates that pay growth, excluding bonuses, fell to 6.6% in the three months leading up to November last year, a significant drop from the previous 7.3%. The latest figures also show that the number of job vacancies experienced a declining trend of 18 consecutive months, with retailers being the worst impacted sector.
The trend of the UK’s jobs market slowed down, with a quantifiable drop in the number of job vacancies, despite the country heading towards a crucial period of trading prior to the Christmas season. The situation is chiefly affecting the retail sector, where the steepest fall in vacancies has been recorded. Large recruitment companies such as Page Group, Hays, and Robert Walters, have all warned that employer confidence is gravely declining.
In the period between October and December, data by the ONS showed that the estimated number of vacancies in the UK shrunk by 49,000 to 934,000. However, despite the declining trend, the rate of job vacancies remains higher than pre-pandemic levels. Reports by the ONS reveal that pay growth fell below its August 2021 peak of 7.9%, as diminishing recruitment difficulties were partly due to the COVID-19 pandemic.
Grant Fitzner, the Chief Economist at ONS, stated that there were indications of the labor market softening in recent months. He emphasized that employers and businesses reporting recruitment difficulties had significantly fallen in the past year. While Neil Carberry, the Recruitment and Employment Confederation’s chief executive, noted that the jobs market seemed to be in a standoff with the wider economy, with both employers and candidates waiting to see how the economy develops before committing to new roles.
However, economists warn that slowing pay growth signals more difficulty for the labor market in the future. Job vacancies in the UK are expected to fall further, leading to pay growth projected to hit 2% by the end of the year, according to KPMG UK. This fall may bolster the case for interest rate cuts potentially later in 2022, said Yael Selfin, KPMG’s Chief Economist.
The latest figures on the UK’s jobs market reflect that the unemployment rate remains mostly unchanged at 4.2%, with 6.6% annual public sector pay growth estimated in November 2021, surpassing private sector pay growth by a slim margin of 0.1%
Read the full article from The BBC here: Read More