Pay lags behind inflation while unemployment rate rises

The Office for National Statistics said regular pay, excluding bonuses, grew by 4.7 per cent over the three months to June.

Analysts had predicted that wages would increase by 4.5 per cent.

It comes after CPI inflation hit a new 40-year record of 9.4 per cent in June and is expected to peak at around 11 per cent later this year.

The ONS said this resulted in a 4.1 per cent drop in regular pay for employees once CPI inflation is taken into account, representing the biggest slump since records began in 2001.

Official figures also showed that the number of UK workers on payrolls rose by 73,000 between June and July to 29.7 million.

Meanwhile, the unemployment rate increased to 3.8 per cent for the quarter compared with 3.7 per cent for the previous period. There were 1.29 million unemployed in the three months to June.

Vacancy numbers hit 1.27 million over the three months from May to July, slipping by 19,800 in the first signal the UK's hot labour market could be cooling.

In the West Midlands – including Shropshire – the unemployment figure was 138,000 in the three months to June. The region's employment rate was 60 per cent – 2.83 million.

The West Midlands saw a fall in the numbers claiming unemployment benefits, including Universal Credit last month. The total of 177,925 was down 2.010 on June. The national claimants total was 1.54 million.

In Shropshire the number of claimants was down by 40 to 4,520 with Telford and Wrekin having a drop of 55 to 4,060. Powys had 70 fewer claimants at 1,670.

Ben Marr, partnership manager (Shropshire) for the Department for Work and Pensions, said: "Figures up until June saw unemployment in Shropshire and Telford regions continue to fall. Vacancies in the area remain at record levels with 460 jobs across a variety of sectors available on the Find a Job website alone.

"Jobcentres across the region are working with an increasing number of employers in Telford and Shropshire to help fill these vacancies and we are supporting with ongoing jobs fairs and recruitment days.

"To help jobseekers gain the skills or qualifications for some of these vacancies we are increasing the number of support and training events we offer. We recently held a pre-employment training event to help people get ready to apply for civil service jobs at our DWP Contact Centre in Telford and had over 50 people referred to the event.

"In the next two months will be running training events that include teaching assistant, customer service and construction with a CSCS card.

"On August 18 we are hosting a recruitment day at Shrewsbury JCP for Oxbow Manor – a new residential home opening in Shrewsbury shortly, to fill vacancies including care assistants, nurses, housekeeping, kitchen, reception, chefs, activity co-ordinator and some management opportunities.

"With Universal Credit, more people are recognising that they are better off in work and taking up the record vacancies we have. In Shropshire, jobseekers can get a tailored ‘in work calculation’ from their work coaches to help them understand the positive impact work will have on their finances."

ONS director of economic statistics Darren Morgan said: "The number of people in work grew in the second quarter of 2022, whilst the headline rates of unemployment and of people neither working nor looking for a job were little changed.

"Meanwhile, the total number of hours worked each week appears to have stabilised very slightly below pre-pandemic levels. Redundancies are still at very low levels.

"However, although the number of job vacancies remains historically very high, it fell for the first time since the summer of 2020."

Chancellor Nadhim Zahawi said: "Today's stats demonstrate that the jobs market is in a strong position, with unemployment lower than at almost any point in the past 40 years _ good news in what I know are difficult times for people.

"This highlights the resilience of the UK economy and the fantastic businesses who are creating new jobs across the country."