Wage freezes and record-breaking vacancy figures for the UK in employment figures today

According to the UK’s Office for National Statistics (ONS), vacancy numbers have fallen for the seventeenth consecutive period in the UK – the longest run of quarterly falls the country has ever recorded.

The amount of jobs available in September 2023 was estimated to be a record 36.8 million according to the UK’s Office for National Statistics – an increase of more than 200,000 since June 2023 and back up at pre-pandemic levels.

Not all good news

However, the update has also sparked concern across the United Kingdom. The Office for National Statistics (ONS) revealed troubling trends in the country’s labour market, indicating a significant slowdown in pay growth and a decrease in job vacancies. These developments point towards a stagnating economy and raise questions about the future of the UK’s workforce and economic stability.

According to the ONS report, there has been a sharp decline in the growth of average earnings, falling from 8 percent to 7.2 percent in the three months leading up to October. This reduction surpasses the expectations of financial markets, indicating a more severe economic slowdown than anticipated. Concurrently, the number of job vacancies experienced a notable decrease, dropping by 45,000 to 949,000 during a period of stalled growth.

Unemployment unchanged

Meanwhile, unemployment figures have remained largely flat at 4.2 percent.

Darren Morgan, ONS chief economist told the media today that:

The BoE and UK’s payroll data

However, it is arguably the ONS’ payroll data, also released today, which is the most important. Ahead of its next interest rates announcement later this week, the Bank of England will no doubt be watching UK residents’ cost of living metrics just as closely as their employment figures.

The rate of growth in median pay fell again in November 2023 to 5.3 percent, down from October’s 6.2 percent and September’s 5.9 percent – managing to be virtually unchanged YoY from November 2021’s 5.4 percent figures.

This couple with the alarming average earnings growth figures has critical implications for the Bank of England, which closely monitors pay increases as an indicator of inflationary pressures within the economy.

The current data, however, suggests a potential easing of concerns regarding a wage-price spiral, a situation where rising wages lead to increased prices, thereby fueling further wage demands.

More strikes in store?

At the same time, in the face of disappointing pay increase data, trouble may be brewing with even more strikes for the UK ahead.

The Trade Union Congress said in a statement on December 9^th that “longer and more frequent strikes” lie ahead.

As Bristol mayor Marvin Rees said in the statement: