You are here: Home - Household Bills - News -

Unemployment drops to lowest rate in almost 50 years

Written by: John Fitzsimons
The unemployment rate fell to just 3.6% in the three months to July, latest data from the Office for National Statistics (ONS) revealed.

That’s the lowest level seen since 1974, almost five decades ago.

The data showed that the number of pay-rolled employees grew by 2.8% in August compared to the same period last year, a rise of around 800,000 over the 12-month period.

Early estimates for last month also revealed median monthly pay increased by 6.5% over the same period, which represents a jump of 13.7% since February 2020 and the start of the pandemic.

Shrinking purchasing power

Myron Jobson, senior personal finance analyst at Interactive Investor noted that total employment is below its pre-pandemic level, pointing out that unemployment falling is also driven by a rise in the number of people becoming “economically inactive”.

He said: “While pay packets are still growing faster than before the pandemic, they appear to be decelerating.

“For many workers, the painful reality is their pay packets are not stretching far enough to cover the escalating cost of living. Despite one of the tightest job market on record, soaring inflation, which far outstrips wage growth, has led to the largest pay cuts in real terms.”

This was echoed by Alice Haine, personal finance analyst at BestInvest, who noted that when inflation is taken into account, workers have seen the purchasing power of their salaries fall 2.8%.

She said: “It means employee spending power is now severely compromised and with inflation expected to edge higher on Wednesday, when the ONS releases the latest reading, how far wages can go in the daily lives of workers will be tested once again.” 

Standing out from the crowd

Employers looking to attract new staff and retain existing workers are having to get creative, according to Louise Skittrall, founder of Robinson Grace HR Consultancy.

She noted that many businesses cannot afford to simply raise pay across the board, so are “thinking outside the box”.

Non-monetary and low-cost options are being put in place by savvy employers. These include subsidised or free staff meals and food bank-style fridges or food baskets to enable food swaps among staff. Some employers are offering free personal hygiene products in the workplace and are negotiating staff discounts in supermarkets, food outlets and local stores,” she added.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Big flu jab price hikes this winter: Where’s cheapest if you can’t get a free vaccine?

Pharmacies, supermarkets and health retailers are starting to offer flu jabs ahead of the winter season, but t...

Is now the time to fix your energy deal?

Fixed energy tariffs all but disappeared during the energy crisis. But now they are back with an increasing nu...

Everything you need to know about the pension triple lock

Retirees are braced to receive another bumper state pension pay rise next year due to the triple lock mechanis...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

The best student bank accounts in 2023: Cash offers, tastecards and 0% overdrafts

A number of banks are luring in new student customers with cold hard cash this year – while others are compe...

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Money Tips of the Week