UK pay growth stays high – but Britons are feeling the pinch
Tuesday’s latest snapshot of the UK jobs market shows what is becoming a familiar pattern: a gradual slowdown in hiring, rising unemployment, yet with wage growth still uncomfortably high for policymakers.Whether because of Rachel Reeves’s £25bn national insurance increase, uncertainty over her upcoming budget, AI-related disruption or Donald Trump’s tariffs – or perhaps all four – companies seem to be cautious about taking on staff.In the July to August period, the number of vacancies in the economy was down by 119,000 on a year earlier.The unemployment data only runs to July – but it shows 2.3 unemployed people for each vacancy, up from 2.
2 in the previous quarter,The unemployment rate was up by 0,1 percentage points on the previous three months – at 4,7% – the highest rate in four years,Employment was also rising, however, in part as more people move from being economically inactive, into the workforce.
At 21,1%, the economic inactivity rate was down 0,8 percentage points on a year earlier – though it remains stubbornly higher than before the pandemic,And as Helen Gray, the chief economist at the Learning and Work Institute thinktank, said: “While economic inactivity is falling, a sizeable number of those returning to the labour market appear to be seeking work, rather than entering employment,”Bank of England policymakers, who meet on Thursday to decide interest rates, have been waiting for this slowdown in the labour market – under way for many months now – to bring wage inflation under control.
Yet so far that has been a slow process, and wage growth remained relatively robust, at an annual rate of 4.8% excluding bonuses in the three months to July, according to the ONS.When wages are rising strongly, economists fret that it will create the space for companies to continue raising their prices, contributing to a further round of inflation.Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotionThe Bank’s governor, Andrew Bailey, has repeatedly stressed the importance of the jobs market, and specifically wages, in determining where interest rates go from their current level of 4%.The latest data makes it even less likely that the Bank’s monetary policy committee will cut rates this week.
While wage growth remains higher than the Bank believes is consistent with meeting its inflation target, however, it will not feel that way for workers.With inflation on the rise again, pushed up by food prices and energy bills, the ONS calculates that real wages are just 1% higher than a year ago – or 0.5% once housing costs are taken into account.That is likely to mean that many consumers continue to feel the pinch, despite Labour’s stated determination to ensure economic growth can be felt in workers’ pockets.As Ben Harrison, the director of the Work Foundation thinktank, put it: “The combination of stagnant living standards and sticky inflation means that people are still likely to feel pessimistic about their household finances one year into the new parliament.
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Get tough on tobacco and alcohol firms to improve public health | Letters
The “timid” approach by the government when it comes to regulating businesses is a shift from the promises of just a year ago to face down the nanny-state jibes to secure the long-term future of the NHS (Editorial, 9 September). This approach is also at odds with public sentiment. Recent polling showed 74% of people want the government to prioritise people’s health over business growth.With millions of people affected by preventable diseases caused by tobacco, alcohol and unhealthy food, we need stronger action from the government to match the rhetoric – including minimum unit pricing to prevent strong alcohol being sold cheaply, a levy on the profits of the tobacco industry and the implementation of mandatory policies to improve food and drink.This will not just benefit the NHS but support the government’s growth ambition, given the heavy toll of poor health on productivity and the wider economy
Reasons for rise in caesarean births | Letter
The rise in the rate of medically assisted births in the UK, particularly caesareans, is laid firmly at the feet of women for being older, larger and having more complex medical problems (Report, 11 September). This ignores a range of clinical and societal factors that contribute. Maternal factors play a part, but so does the rise in defensive clinical practice, the loss of midwives’ and obstetricians’ skills and confidence in supporting physiological birth, and the proliferation of misinformation and scare stories on social media that increase parental anxiety.All these factors have led us to the current crisis, where more than 50% of babies are born with surgical intervention, with no concomitant improvement in maternal or perinatal mortality and with unknown consequences for the health and wellbeing of future generations. Dr Debbie GarrodMidwife and antenatal educator, Abingdon, Oxfordshire Have an opinion on anything you’ve read in the Guardian today? Please email us your letter and it will be considered for publication in our letters section
Prisons in England and Wales to cut spending on education courses by up to 50%
Prisons across England and Wales are set to slash frontline spending on education courses by up to 50%, despite promises from Keir Starmer to improve “access to learning” in last year’s general election manifesto.The budget for classroom courses at HMP Leicester will be cut by 46.5%, another men’s prison is cutting spending by 25%, while a women’s prison is cutting its provision in education by 26%, sources have confirmed.In one prison, there will be a reduction in the number of basic English and maths courses, including cuts to the hours of a specialist teacher who helps illiterate prisoners to read.Labour promised in 2024 to “work with prisons to improve offenders’ access to purposeful activity, such as learning”, acknowledging that “prison leavers are more likely to reoffend if they do not have the tools to move away from crime
Government considering compensation for victims of carer’s allowance scandal
The government is considering compensation payouts for unpaid carers who have been unfairly hit with huge financial repayments in recent years after inadvertently falling foul of harsh carer’s allowance benefit rules.Ministers vowed to fix problems with the benefit after a Guardian investigation revealed how draconian penalties coupled with Department for Work and Pensions (DWP) administrative failures had plunged hundreds of thousands of carers into debt.More than 144,000 carers are now repaying £251m in benefit overpayments that typically amount to £5,000 but can be as high as £20,000. Some face life-changing bills after accidentally breaching earnings rules by a few pence a week.The Guardian’s reporting of the DWP’s often brutal treatment of carers who were accidentally caught out by carer’s allowance earnings rules caused public outrage and led to comparisons with the Post Office scandal
‘I kept asking: “Why? What did I do?”’ How come so many young, fit, non-smoking women are getting lung cancer?
For decades, lung cancer has been viewed as a disease of older men who smoked. Now, cases among young women are on the rise and doctors are baffled. Could air pollution be behind it?Towards the end of 2019, Becca Smith’s life was full and hectic. At 28, she had taken on a unit in Chester to convert into a yoga studio, poured in all her savings and hired teachers, while at the same time working as a personal trainer. Her days started at 5am; she was driven, stressed, excited, and had no time for the back pain that just would not subside
NHS access to promising sleeping pill daridorexant is patchy, say doctors
Tens of thousands of prescriptions have been issued in England for a promising and non-addictive new sleeping pill, but doctors say NHS uptake is being held back by cost and patchy awareness.Daridorexant, approved last year, has been prescribed 67,000 times since November 2023, at an estimated cost of £2.6m to the NHS. The drug has been hailed for helping people fall asleep faster, stay asleep longer and wake up clear-headed – without the dependency risks of traditional pills.But access is uneven
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