In a mixed report from the Office for National Statistics today, Britain’s unemployment rate took a slight dip, falling to 3.8 percent in the final quarter of last year.
However, this apparent positive shift was accompanied by a concerning ease in wage growth amidst the country’s persistent struggle with elevated inflation.
Liz McKeown, Director of Economic Statistics at the ONS, pointed out the nuanced picture painted by the latest data.
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“It is clear that employment growth has slowed over the past year,” she stated. “Over the same period, the proportion of people neither working nor looking for work has risen, with historically high numbers of people saying they are long-term sick.”
The ONS also reported that UK average regular earnings growth eased to 6.2 percent in the final quarter of last year, highlighting a potential strain on household finances amidst the ongoing cost-of-living crisis.
Reacting to the news, Finance Minister Jeremy Hunt acknowledged the positive aspect of rising real wages but emphasized that there’s still work to be done. “Our tax cuts are part of a plan to get people back to work so we can grow the economy – but we must stick with it,” he stated.
Analysts are predicting further tax cuts from the government, especially with a general election looming on the horizon.
Prime Minister Rishi Sunak’s Conservative party trails behind the opposition Labour in the polls and tax cuts are seen as a strategic move to regain political ground.
As Britain navigates these economic challenges, the focus remains on finding a balance between fostering employment opportunities and ensuring sustainable wage growth against the backdrop of persistent inflation pressures.