UK pay data beats forecasts, employment growth slows

UK’s labour market has performed robustly since it voted to leave the European Union

Workers leave the Ford Bridgend Engine plant in south Wales

Workers leave the Ford Bridgend Engine plant in south Wales

 

UK wages in the three months to April grew faster than expected and hiring slowed less sharply, as the jobless rate held at its lowest rate since 1975, official figures showed on Tuesday.

Total earnings growth, including bonuses, rose by an annual 3.1 per cent in the three months to April, official data showed, slowing from 3.3 per cent in March but beating the median forecast of 3 per cent in a Reuters poll of economists, the Office for National Statistics said.

Excluding bonuses, which smooths out some volatility, pay growth picked up to 3.4 per cent from 3.3 per cent , beating all forecasts and boosted by a 3.8 per cent annual jump in pay for April alone, the largest single-month rise since May 2008.

“Overall, the labour market continues to be strong,” ONS statistician Matt Hughes said. The UK’s labour market has performed robustly since it voted to leave the European Union in June 2016, in contrast to other parts of the economy which have suffered from uncertainty about the timing and terms on which Britain will leave.

Official figures on Monday showed the economy shrank by 0.4 per cent in April, its biggest monthly drop since 2016. The unemployment rate remained at 3.8 per cent as expected, its joint-lowest since the three months to January 1975, and the absolute number of people out of work dropped by 34,000 to 1.304 million.

The number of people in employment rose by 32,000 to 32.746 million, the smallest increase since the three months to August last year, as employers increasingly say it is hard to find staff. The BoE last month said it expected wage growth of 3 per cent at the end of this year.

But it sees the UK’s hiring spree as a reflection of how many firms have opted to take on workers rather than commit to longer-term investments. - Reuters