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UK wage growth picks up to 3.4 per cent but vacancies fall again, official data shows



Growth in UK wages accelerated between March and May, after an earlier slowdown, but the number of vacancies continued falling, official data showed on Tuesday. 

Total pay, including bonuses, rose 3.4 per cent compared with a year earlier, up from 3.1 per cent growth in the three months to April, the Office for National Statistics said. After adjusting for inflation, pay ticked up by a smaller 1.4 per cent and regular pay, which excludes bonuses, rose by 1.7 per cent. 

Nye Cominetti, economic analyst at the Resolution Foundation, said pay packets had been partly boosted by an increase in the National Living Wage that benefited around 2 million workers.

“With real average earnings still £5 a week lower than its peak over a decade ago, it’s important that [regular] pay growth continues to head back towards its pre-crisis average of over 2 per cent.”

Vacancies, which are measured with a smaller lag than wages, dropped to 827,000 in the April-June period, a fall compared both with a year earlier and the January-March period.    

The unemployment rate remained unchanged at 3.8 per cent, the lowest since the mid-1970s. 

Overall, the data confirms a cautious assessment by the Bank of England’s Gertjan Vlieghe, who said last week that the so far robust UK labour market might have reached the limits of growth. 

The steady decline in vacancies this year also masks the difficulty of filling many job openings.

“Skills shortages are now clearly evident across all sectors,” said Tej Parikh, chief economist at the Institute of Directors. “S

erious work [is] needed to upskill our workforce and to fine-tune our immigration policy in light of the talent shortfall facing the country.”

The veiled warning about the likely consequences of Brexit follows a starker prediction from Mark Carney last week. The governor of the Bank of England said businesses expect they will have to cut jobs if Britain leaves the EU without a deal, as their sales go down and costs go up.

There are signs the UK’s looming departure is already having an impact on hiring. Large recruitment company Hays said earlier on Tuesday that its net fees in the UK and Ireland were down 2 per cent between April and June, pulled down by a 6 per cent fall in fees for private sector placements.  

 



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