- Before inflation, wages in January-March were up 6% in a year excluding bonuses and 5.7% with them.
- After inflation, wages rose 1.7% including bonuses and 2% excluding them. This has risen as inflation has fallen.
- Over both the most recent quarter and the year, the unemployment rate has risen (4.3%), the employment rate has fallen (74.5%) and economic inactivity (22.1%) has increased.
- Redundancies fell on the quarter by 0.9 per thousand, to 3.1 per thousand, but they’re still higher than a year earlier.
- Vacancies fell for the 22nd consecutive time – in 13 of 18 industries.
- Pay growth for the private sector was 5.9%. For the public sector it was 6.3%.
- What this means for rates.
- What this means for you.
The ONS has released employment and wage data covering the year to January-March: Employment in the UK – Office for National Statistics (ons.gov.uk)
Susannah Streeter, head of money and markets, Hargreaves Lansdown:
What this means for rates
“Pay growth remains steamy, with bonuses in March the highest on record. This may keep policymakers at the Bank of England a bit hot under the collar. They’ll be worried about the persistence of inflationary pressures.
However, with unemployment rising, there are signs the labour market should keep cooling, keeping hopes for a summer interest rate cut alive. Annual total earnings for the public sector remains strong at 6.3% in the first quarter of the year, while in the private sector, this was 5.9%. The concern is that hefty wage bills may be passed on in the form of higher prices for goods and services.
Inactivity rates have also shifted higher, with the numbers of long-term sick limiting the pools of available labour. This does make the Bank of England decision to cut rates more tricky, and they’ll want to see more data indicating an easing of pressures, which is why an August rate cut is looking more likely. The pound rose slightly on the labour market data, against the dollar, indicating that markets see Bank moving a little more slowly on rates.”
Sarah Coles, head of personal finance, Hargreaves Lansdown:
What this means for you
“The jobs market is horribly divided, and the gaps are growing. On the one side are those in secure jobs, in the manufacturing and finance and business services sectors, who are sitting pretty with wages up 6.8% and March bonuses burning a hole in their pockets. On the other are the rising numbers of people losing their job, and those in the construction sector, facing pay rises of just 2.6% – way below inflation. There’s nothing burning a hole in their pocket – because there’s a growing risk of having nothing in their pockets at all.
The jobs flows data shows movement from employment into unemployment and inactivity, and a move from inactivity to unemployment. As a result, unemployment has risen for those unemployed over every period – up to six months, 6-12 months and over 12 months. It means we all need to seriously consider what we would do if we lost work – especially if you’re currently enjoying strong pay rises, and even a bonus.
The HL Savings & Resilience Barometer shows just how horribly tough life becomes when you’re out of work. You have an average of just £37 left at the end of the month when the bare essentials are covered, and are either eating into any savings or building up debts – and that’s despite the fact your spending is only around a third of the level of people who are working.
It’s worth checking your emergency savings cuts the mustard. You should aim for cash to cover 3-6 months’ worth of essential expenses in an easy access savings accounts or cash ISAs, but you’ll be grateful for whatever you can afford to put away. If you have paused pension or SIPP contributions, now is the time to re-start them, and use a pension calculator to see what you can do to rebuild.”
