Official statistics show third quarter slowdown in wage growth
UK wage growth slowed in the three months to September according to official figures from the Office for National Statistics.
ONS numbers also showed that unemployment fell by 23,000 to total 1.31 million during the period, but coincided with a fall in the number of people in work.
The number of people in work during the three month period fell by 58,000, the biggest drop since May 2015, which saw a decline of 65,000.
Average weekly pay pre-tax reached £470 in real terms, while average earnings without bonuses grew 3.6 per cent.
The period also saw the biggest annual drop in the number of job vacancies in almost a decade, as advertised vacancies fell by 18,000 to total 800,000. It was the ninth month of consecutive decline in job availability.
Culpable factors include reduced numbers of people working in the retail sector, exacerbated by shop unit closures and the collapse of certain high-street chains.
An ONS spokesperson said of the figures: “The employment rate is higher than a year ago, though broadly unchanged in recent months. Vacancies have seen their biggest annual fall since late 2009, but remain high by historical standards.
“The number of EU nationals in work was very little changed on the year, with almost all the growth in overseas workers coming from non-EU nationals.”
Tej Parikh, chief economist at the Insitute of Directors, said in response to the figures that wage growth may slow even further before any upturn.
He said: “The pick-up in wage growth earlier this year has been a plus, but there is clearly a limit to how high pay packets can go. With many firms facing elevated costs and difficulties raising their productivity game, the margins to raise pay are eroding. A further acceleration in wages now looks unlikely.”
Other economists say that the figures show a fall in the demand for labour and point toward interest rates remaining low, after news that the UK economy was also growing at its slowest yearly rate since 2010.
Chris Williamson of IHS Markit said that "uncertainty" over outlook had deterred firms from hiring extra staff, while Samuel Tombs of Pantheon Macroeconomics said: "The pace of weakening in the labour market remains gradual enough for the Monetary Policy Committee to hold back from cutting bank rate over the coming months.”