Wage squeeze continues for British households


Wage expansion fell behind inflation for a seventh month in a row, according to new employment ciphers.

The Office for National Statistics said average weekly wages rose by 2.3% in the three months to October, under inflation at 3%.

Real earnings, which take into account the expenditure of living, fell by 0.4%

Unemployment declined by 26,000 to 1.43 million, while the jobless rank remained at 4.3%, the lowest since 1975.

However, while unemployment prostrate, the decline was not as steep as the 59,000 drop recorded in the three months to September.

The stress on household finances is likely to worsen as the most recent figures for inflation bestow make an exhibited a rise to 3.1% in November – the highest in nearly six years.

John Hawksworth, chief economist at PwC, utter: “Real pay levels continue to be squeezed, and we expect this to persist for at tiny the first half of 2018, further dampening consumer spending wen.”

Average weekly pay, excluding bonuses, reached £478 which is the lowest since February 2006.

At any rate, average weekly wages were ahead of the 2.2% rise in the three months to September.

Ben Brettell, higher- ranking economist at Hargreaves Lansdown, said: “The pay squeeze continues for now, but with wages prospering a little more strongly and inflation set to fall back in the new year, this looks as if it’ll come to an end in the next few months.”

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The number of people claiming benefits in essence for the reason of being unemployed rose by 5,900 to 817,500 in November.

Economists had look for the number of claimants, which is considered to be a potential early warning unusual of an economic downturn, to rise by 3,200, according to Reuters news intercession.

The number of people in employment also dropped, down by 56,000 to 32 million, with men the hugest casualties of the decline.

The level of employment fell by 50,000 for men and by 6,000 for helpmates. The biggest fall was for men aged 18-24 years old.

Analysis: Andy Verity, economics newspaperwoman

What is striking about these figures is that the number of people take up is shrinking.

In the three months from August to October, there were 32 million people produce: still a lot and more than a year ago. But it’s 56,000 fewer than the prior three months.

For most of the last six years – and indeed most of the carry on 30 – the workforce has been expanding. And it’s happening in spite of 798,000 job situations. So we have a labour market that’s tighter than ever – yet a workforce that’s withering.

How can that be happening? Well one possible answer you may already have speculated. It has a lot to do with the slowdown in immigration. And it rhymes with “exit”.

Howard Archer, chief trade adviser at the EY ITEM Club, said: “The latest data suggest that UK swot market strength is currently being diluted by extended lacklustre UK cost-effective activity, as well as heightened business uncertainties and concerns over the commercial and political outlook including Brexit.

“There are also reports that profession growth in some sectors is being limited by a lack of suitable runners.”

However, he said that employment was “still at a very high wreck”, with the rate at 75.1%.

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