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Job numbers slip back as pay squeeze continues

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The number of people in work fell by 56,000 in the three months to October

By Sunita Patel-Carstairs, Business Reporter

Britain's jobs boom shows signs of faltering after a second consecutive fall in the number of people in work, while pay continues to lag behind inflation, official figures show.

There are just over 32 million people in employment, but the 56,000 drop between August and October is the largest since the three months to May 2015, the Office for National Statistics (ONS) said.

That was despite a continued fall in joblessness, explained by the number of people classed as economically inactive – meaning they are not seeking or available to work – rising by 115,000 to 8.8 million.

Average earnings, excluding bonuses, rose by 2.3% in the year to October.

This means pay in real terms – when taking into account inflation – dropped by 0.4%, the eighth month in a row of decline.

Pay slip
Pay growth has been lower than the rise in the cost of living for several months

The figures come a day after official data showed inflation had risen to a near six-year high of 3.1% in November – forcing the Bank of England to explain the unexpected rise to Chancellor Philip Hammond.

Economists said the data may have signalled the end of an employment upswing and described the wage growth as "anaemic at best".

Stephen Clarke, Economic Analyst at the Resolution Foundation, said: "Britain's remarkable jobs boom looks like it may have finally reached the end of the road."

He added the country's "equally remarkable pay squeeze will continue to bite in the run-up to Christmas, with wage growth for 2018 expected to be anaemic at best".

Howard Archer, chief economic advisor to the EY ITEM Club said: "The latest data indicates that the UK labour market is faltering after extended resilience.

Meanwhile, underlying earnings growth only crept up. Consequently, consumers continue to face a serious squeeze on purchasing power."

The unemployment rate remained static at 4.3%, its lowest level since 1975.

The jobless total fell by 26,000 to 1.4 million, which is 182,000 lower than a year ago.

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Trades Union Congress general secretary Frances O'Grady said: "2017 has been a bleak year for living standards.

"Real wages have now fallen for the last eight months in a row and working people will be worse off this Christmas than they were a decade ago.

"Boosting pay packets should be a priority for the Government – not a side issue."

Improvements in productivity would mean faster wage growth, a wider economic boost, and a healthier tax intake for the Treasury.

But these have failed to materialise as expected since the financial crisis.

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Other figures showed the number of people in work in the public sector rose by 19,000 in September to 5.4 million, mainly due to an increase in the NHS workforce, while the job count in the private sector fell by 75,000 to 26.5 million.

Employment minister Damian Hinds said: "We're ending the year on a strong note, with figures showing the unemployment rate has fallen every month in 2017, and is now at the lowest it's been in over 40 years."

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Source – News.sky.com

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