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14 November 2014

Wage growth outstrips inflation in September, ONS data shows

Record level of female employment and more full-time work contributes to labour market growth

A record-breaking 30.79 million people are now in employment in the UK, official figures show.

Office for National Statistics (ONS) data for June to September 2014 revealed that there were 694,000 more people in jobs, compared to the same period last year.

Employment increased by 112,000 from the previous quarter, with the vast majority of the rise coming from people in full-time roles. There were 22.52 million people working full-time in the three months to September, 589,000 more than a year earlier.

Most of the jobs were created in the private sector, which employment minister Esther McVey said is proof that the government’s long-term economic plan to back businesses is working.

Those in the private sector also fared well when it came to wages, up 1.6 per cent in a year. While average regular pay (excluding bonuses) rose 1.3 per cent in a year, the Consumer Price Index increased by 1.2 per cent in September.

“Record numbers of people in work means more people with the security of a regular wage who are better able to support themselves and their families,” McVey said.

“More young people are getting their foot on the career ladder and we’ve seen record falls in female unemployment, so as the economy continues to grow, more and more people are having their lives transformed by moving into work.”

According to the ONS, the UK has seen the fastest growth in the number of women in work in the last year, out of all G7 economies. This year’s fall in female unemployment is the largest on record.

Of those women working part time, almost nine in ten have chosen to work part time because it suits them, a spokesman from the Department for Work and Pensions (DWP) said. The number of women working part time who want full-time work is falling, down 43,000 over the last year.

Commenting on the figures, Gerwyn Davies, labour market adviser at the CIPD, said: “News that wages have risen relatively sharply compared with last month and are now approaching parity with inflation is good news for people in work. However, it will be a few months yet before we see whether this is a sign that employers have caught the Christmas spirit early or if this is the beginning of the long-awaited, long-term boost to pay packets we’ve been hoping to see.

“Indeed, with so many applicants chasing jobs, it is easy to see why basic pay growth remains well below pre-recession levels. As the CIPD reported earlier this week, employers are currently receiving 60 applicants for every low-skilled job, and 20 applicants for every high-skilled job,” he added.

Davies said that although there are signs of increased productivity, businesses would have to invest in ways to help employees to “work smarter, not just harder.”

“Truly productive workplaces will be the ones that deliver smarter working by paying close attention to effective people management practices that put an emphasis on employee involvement and participation,” he said.

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