Britain’s unemployment remains at a 42-year low but wage growth is failing to keep pace with surging inflation, official data showed today.
The unemployment rate stood at 4.3 per cent in the quarter to the end of August, unchanged from the three months to July, the Office for National Statistics (ONS) said in a statement.
That was the lowest rate — or proportion of the workforce that are unemployed — since 1975.
At the same time, growth in wages continue to lag far behind Britain’s annual inflation rate, further eroding the purchasing power of workers and stretching household budgets.
Average weekly earnings rose by 2.2 per cent year-on-year in the three-month period to August, unchanged from last time around.
Britain’s Consumer Prices Index (CPI) 12-month inflation rate hit 3.0 per cent last month — the highest level for more than five years — as the Brexit-hit pound ramped up the cost of imported goods, the ONS revealed yesterday.
Analysts widely believe that the Bank of England will respond to the inflation data by raising interest rates next month. “Many labour market measures continue to strengthen,” said ONS statistician Matt Hughes in reference to the data release on Wednesday.
“On the other hand, total earnings in cash terms grew slower than prices over the last year, meaning the real value continues to fall.” The combination of rising inflation and stagnating wage growth meant that real wages fell by 0.3 percent.
A total of 1.4 million people were recorded unemployed at the end of August, down 215,000 on a year earlier, the ONS added.