UK pay picks up slightly but employment falls for second month
LONDON (Reuters) – Pay growth for British workers quickened slightly in the three months to October but there was another drop in employment, official figures showed, suggesting employers are turning more cautious as Brexit nears.
Britain’s economy slowed sharply this year as the 2016 Brexit vote weighed on households and companies, but job creation has largely remained strong until recently.
The number of people in work fell by 56,000 during the three months to October, the most since mid-2015, the Office for National Statistics (ONS) said on Wednesday. It was the second consecutive fall.
The data also showed the unemployment rate held unexpectedly at its four-decade low of 4.3 percent, against expectations for a further decrease to 4.2 percent in a Reuters poll of economists.
The Bank of England increased interest rates for the first time since 2007 last month as most of its policymakers thought the steep fall in unemployment will soon start to push up wages.
The BoE’s next rate decision announcement is due on Thursday.
The ONS said workers’ total earnings, excluding bonuses, rose by an annual 2.3 percent in the three months to October, compared with 2.2 percent in the three months to September. Economists had expected to see no improvement.
That was weaker than the latest 3.1 percent reading of British consumer price inflation in November and the ONS said wages in real terms dropped by an annual 0.2 percent.
Including bonuses, wage growth picked up to 2.5 percent from 2.3 percent, as expected in the Reuters poll, although the annual comparison was flattered by weak bonus payments this time last year.
The number of unemployment benefit claimants rose by 5,900 to 817,500 in November while the number of vacancies hit a new record high of 798,000.
Economists taking part in the Reuters poll had expected the number of benefit claimants – which is considered to be a potential early warning sign of an economic downturn – to rise by 3,200.
The ONS said there was a rise in the number of people who were neither working nor looking for a job.