The UK labour market defied forecasts of further weakness in June after official data showed on Tuesday that unemployment fell but wage growth slowed to its lowest level in two years, The Guardian reports.
The Office for National Statistics (ONS) said unemployment unexpectedly fell to 4.2 per cent in the three months of June from 4.4 per cent in the previous three months.
However, wage growth excluding bonuses was 5.4 per cent year-on-year in the three months to June, down from 5.7 per cent in the previous three months and representing the smallest increase since the period to July 2022, when it was 5.2 per cent.
On an inflation-adjusted basis, wages rose by 1.6 per cent, meaning that living standards will continue to improve for many workers.
The chancellor, Rachel Reeves, said:
“Today’s figures show there is more to do in supporting people into employment because if you can work, you should work. This will be part of my budget later in the year where I will be making difficult decisions on spending, welfare and tax to fix the foundations of our economy so we can rebuild Britain and make every part of our country better off.”
Reeves will present his first budget on October 30. Salary growth in finance and business services outpaced other sectors, rising 6.2 per cent year-on-year.
The ONS said:
“The construction sector saw the smallest annual regular pay growth across sectors, at 3.5%. In April to June 2024, the manufacturing sector saw the largest annual total pay growth at 6.7%.”
