All the day’s economic and financial news, including new UK unemployment and earnings figures
- UK jobless rate falls to 4.3%, lowest since 1975
- But wages only grow by 2.1%, below inflation
- Fidelity: Household finances at breaking point
- The key charts
Jeremy Cook, chief economist at currency firm WorldFirst, says we shouldn’t celebrate the fall in the UK unemployment rate to a 42-year low.
“There are more people in work than there have been for over 40 years, yet those people are only getting poorer due to wages that can’t keep up with inflation. Pay increases are simply not coming for a multitude of reasons.
Low productivity, Brexit fears over the future of individual sectors’ trade relationships and margins cut by higher import costs have all been referenced by companies large and small so far in 2017.
Britain’s weak wage growth is leaving consumers struggling to cope, warns Ed Monk, associate director for personal investing at Fidelity International.
Monk calls today’s report a “bitter pill to swallow”, adding:
Yesterday’s UK CPI figures showed that inflation had jumped to 2.9% which means that wages are falling further behind the price we pay for goods and services.
As a result UK households will continue to have their finances stretched to breaking point.
“Lagging wages makes it more likely the Bank of England will look through rising inflation when it decides on interest rates this week.
Prices are rising above target, which creates the case for raising rates, but today’s wage data suggests all is still not right in the economy.