Government ministers have made a commitment to address the issue of ‘spiraling inactivity’ and stimulate economic growth in order to reach an 80 percent employment rate.
UK wage growth has dropped to its lowest level in over two years, as official data reveals a rise in the unemployment rate. The Office for National Statistics reported that annual growth in average regular earnings, excluding bonuses, was 4.8 percent in July to September, down from 4.9 percent in the previous three months – the lowest level since June 2022. Despite this, pay still outpaced inflation, increasing by 2.7 percent.
Liz McKeown, ONS director of economic statistics, commented on the latest labor market figures, noting that pay growth, excluding bonuses, had slowed to its lowest rate in more than two years. She also highlighted that pay growth, including bonuses, rose to 4.3 percent due to one-off payments made to public sector workers last year.
The Bank of England responded to the slowdown in pay growth by reducing interest rates from 5 to 4.75 percent. This decision was made in light of the ongoing progress in disinflation after a period of higher interest rates aimed at curbing price increases.
Unemployment data showed an increase in the rate to 4.3 percent in the three months to September, up from 4 percent in the previous quarter and exceeding most economists’ expectations. The rate is also higher compared to a year ago and pre-COVID-19 levels.
The ONS cautioned that unemployment figures should be interpreted with care due to low response rates in its jobs survey. McKeown mentioned on social media platform X that data collection improvements introduced earlier in the year are still being implemented.
The number of people on payrolls slightly decreased in September, with the ONS noting a continued slowdown in annual growth. Job vacancies also dropped, marking the 28th consecutive decrease to 831,000, although levels remain above pre-pandemic figures.
The economic inactivity rate for July to September 2024 was estimated at 21.8 percent, with figures declining in the latest quarter and below estimates from a year ago.
Downing Street has pledged to tackle unemployment and economic inactivity as part of its growth mission to achieve an 80 percent employment rate. Work and Pensions Secretary Liz Kendall highlighted the significant number of people out of work due to long-term sickness and announced a cash injection for local services to support employment initiatives.
Business leaders have raised concerns about the impact of changes introduced in the Autumn Budget on economic growth and employment. Hospitality bosses warned of potential business closures and job losses, while supermarket giants Asda and Sainsbury’s cautioned about price increases resulting from tax changes.
Overall, the government is working towards boosting employment rates and addressing economic challenges to drive growth and combat inactivity in the workforce. Please rewrite this sentence.
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