Real levels of UK wages fell at the fastest rate for at least 20 years in the second quarter of this year, falling 3% between April and June according to the ONS statistics. This is the sharpest decline in wages since 2001. Rising prices and energy bills further increasing in October emphasises the difficult times ahead for businesses in absorbing increased costs.
The data suggests the cost-of-living crisis to be much tougher for those working in the public sector, with regular pay levels rising at an annual rate of only 1.8 per cent, compared with 5.4 per cent in the private sector. The ONS has stated growth in regular pay, excluding bonuses, was 4.7% in April to June 2022. This is the fastest growth in 15 years, excluding the pandemic. However, prices are rising at an even faster rate, effectively resulting in a fall in pay by a record 3%.
With unemployment low, vacancies are still very high, showing that most people searching for work could find it. After a small decline from a record level, there were still 1.27mn job vacancies in the three months to July for the 1.29mn people who were registered as unemployed and seeking to start work immediately.
Neil Carberry, chief executive of the Recruitment & Employment Confederation, said the “overall picture” in the jobs market was “still positive for those looking for work or to change jobs to increase their pay”. He further commented firms were still struggling with staff shortages, which he claimed would “constrain growth and drive inflation”. The Quarterly Economic Survey is a direct method of reporting business issues, performance, and confidence. The next survey is running 22nd August to 12th September. The Chamber recognises that businesses require help from local and national government to ease the growing concerns over cost of living and the survey enables you to report your concerns to us and we can lobby government on your behalf in order to provide businesses much needed support.