UK Employment Figures, February 2019: Employment and Pay Growth Steady as Brexit Approaches
Employment rate remains at a record high while pay continues to grow, latest ONS numbers show
Rising wages are a byproduct of Britain’s relentlessly tight labour market, which is still bumping along the ceiling of full employment. With the proportion of working age people who have a job remaining at 75.8%, the highest level ever recorded, employers are being forced to crank up wages to prise recruits away from other jobs.
A year ago the average Briton’s spending power was stagnating as paypackets were caught in the crosshairs of low wage growth and painfully high inflation. Now, as inflation slows to its lowest rate in two years, a series of rises in average wages has swelled workers’ spending power. Latest figures show that adjusted for inflation, average pay excluding bonuses is growing at 1.2% a year.
There are signs the market could get even tighter in coming months. Indeed’s data shows that the proportion of online searches for UK jobs coming from other European countries fell by 5% in the three years to January. By contrast, the number of UK-based jobseekers searching for roles in the EU jumped by 11% during the same period. While latest quarterly data shows a pick-up in the number of both EU and non-EU workers, the Brexodus of talent remains a real risk.
With economic growth slowing, wage demands rising and continued uncertainty about future migration policy, these are testing times for Britain’s employers. At the same time, working households face challenges of their own. Despite recent growth, average pay remains below its pre-crisis peak, while the future prospects for rapid, sustained pay growth are weak given that expected productivity growth remains poor.