Increase in employment sees real wage growth

New figures show earnings have risen slightly faster than inflation

Earnings rose above inflation as the number of people in work reached a record high, new figures revealed.

Employment increased by 55,000 in the quarter to February to 32.2 million (75.4%), the highest figure since records began in 1971.

Unemployment fell by 16,000 to 1.42 million, giving a jobless rate of 4.2%, the lowest since 1975, according to the Office for National Statistics (ONS).

In Scotland the number of people unemployed rose 3,000 to 115,000, a rate of 4.2%.

Average earnings rose by 2.8% in the year to February, unchanged on the previous month.

The latest CPI inflation figure is 2.7% and is expected to remain unchanged when new figures are published today.

Senior ONS statistician Matt Hughes said: “The labour market continues to be strong and, for the first time in almost a year, earnings have grown slightly after inflation has been taken into account.”

The number of people classed as economically inactive, including students, those on long-term sick leave, on early retirement, or who have given up looking for work, fell by 2,000 to 8.7 million in the latest quarter, giving a rate of 21%.

The claimant count, which includes people on Jobseeker’s Allowance and the unemployment element of Universal Credit, increased by 11,600 last month to 855,300.

Job vacancies remained unchanged at 815,000, while the number of selfemployed workers fell for the second successive quarter, down by 18,000 to 4.76 million.

The TUC general secretary Frances O’grady said unions had negotiated pay rises for many workers, including Mcdonald’s and Ford staff.

She added: “But wage growth is still weak. Workers are £14 a week worse off than they were in 2007 — with pay packets not expected to return to their pre-crisis level until 2025.”

Suren Thiru, head of economics at the British Chambers of Commerce, added: “The continued rise in employment, coupled with a further drop in the unemployment rate, is further evidence that the UK jobs market remains in good shape, with firms continuing to recruit despite sluggish economic conditions.

“The end of a prolonged squeeze on real wage growth is an important moment, although maintaining positive real wage growth could prove challenging without sustained increases in productivity.”

Top: Frances O’grady, general secretary of the TUC, said workers were worse off than they were in 2007. Above: Suren Thiru, head of economics at British Chamber of Commerce.