### Summary
Average wages in Britain rose at a rate of 7.8% annually between April and June, outpacing inflation of 6.8% in July. However, the long-term picture shows that workers are still no better off than they were four years ago, indicating the need for sustained pay rises to improve living standards.
### Facts
- 💰 Average wages in Britain rose at a rate of 7.8% annually between April and June.
- 📉 Inflation in July was 6.8%, lower than the previous month's figure of 7.9%.
- ⚠️ The long-term data shows that workers are no better off than they were four years ago.
- 🔒 The Bank of England is concerned about wage rises leading to inflation becoming entrenched in the economy.
- 📉 The UK's productivity levels have fallen behind its peers since the financial crisis.
### Additional Information
- The Bank of England and Chancellor discourage asking for higher wages, fearing a wage-price spiral.
- The current UK real average weekly earnings figure is the same as it was in May 2019 and December 2010, and no better than in March 2006.
- Sustained pay rises are needed for workers to improve their living standards.
### Summary
Real wages in most European countries have fallen due to record-high inflation, with nominal wage growth being eroded.
### Facts
- :chart_with_downwards_trend: Real hourly wages decreased in 22 out of 24 European countries between Q1 2022 and Q1 2023, primarily due to inflation exceeding nominal wage growth.
- :chart_with_upwards_trend: Belgium and the Netherlands were the only countries where real hourly wages increased during this period.
- :chart_with_downwards_trend: France, the UK, and Germany also experienced a decline in real hourly wages.
- :money_with_wings: Nominal hourly wages increased in all 24 countries, but the inflation rate was higher, causing real wages to decrease.
- :moneybag: Real wages in Europe have fallen below pre-pandemic levels in most countries, despite recent nominal wage growth.
- :chart_with_downwards_trend: Cumulative change in real hourly wages between Q4 2019 and Q4 2022 ranged from -9.6% in Estonia to 7.1% in Lithuania, with 18 out of 25 countries experiencing a decline.
- :briefcase: Workers in low-paying industries fared relatively better, with real wages performing better than in high-paying industries in many European countries.
(Note: Some bullet points have been omitted for brevity.)
Wages of job offers received by job seekers have spiked, with expectations for wages increasing by 11.8% from a year ago, indicating that inflation is impacting the labor market and fueling concerns about even higher inflation.
Core inflation in the UK may continue to remain high and volatile due to the implementation of Brexit, discrepancies in wage growth, the direct effects of Brexit on prices, and fiscal policy challenges, which could result in higher and more unpredictable inflation compared to the US and euro area.
The US jobs data for July suggests a cooling employment market, with a drop in labor demand and easing of hiring conditions, which could help lower inflation without a significant rise in unemployment rates.
The US added 187,000 jobs in August, but the unemployment rate rose to 3.8 percent, indicating a plateau in the labor market as the Federal Reserve considers another interest rate hike.
Despite weakening economic growth, the unemployment rate remains low, which is puzzling economists and could lead to a "full-employment stagnation" scenario with a potential recession and low unemployment rates, posing challenges for the Federal Reserve and the overall economy.
British employers have reduced hiring through recruitment agencies at the fastest rate in over three years, reflecting concerns about the economic outlook, according to a survey by the Recruitment and Employment Confederation (REC), which also reported a decline in spending on temporary workers for the first time since July 2020. Starting salaries rose at the slowest pace since March 2021, highlighting the challenge for the Bank of England in managing wage growth and inflation.
Wage growth in the UK has caught up with rising prices, resulting in real pay no longer falling, according to official figures, although the unemployment rate has risen and job vacancies have fallen. The data will also impact the state pension, which is set to increase by 8.5% next April.
British pay growth hits a record high, potentially leading the Bank of England to raise interest rates again, despite a cooling labor market with rising unemployment and falling job vacancies.
The UK economy contracted by 0.5% in July due to strike action, bad weather, and weak economic growth, but the broader picture remains positive with growth in services, production, and construction sectors, according to the Office for National Statistics (ONS).
The jobs market is currently in a relatively benign position, with unemployment rates and wage growth neither extremely high nor low, but leading indicators suggest a potential rise in unemployment and a continued deceleration of wage growth in the coming quarters.
Wages in Brighton and Hove have outpaced inflation, while the UK as a whole has seen a real-terms pay increase for the first time since March 2022, although low-paid workers in certain sectors continue to experience wage stagnation.
UK inflation is projected to average 7.2% in 2023, the highest rate among advanced economies, according to the Organisation for Economic Co-operation and Development (OECD), which also raised its forecast for UK inflation.
The Australian government's reliance on the non-accelerating-inflation rate of unemployment (NAIRU) as a measure of full employment is outdated and flawed, as recent data shows that low unemployment has not led to significant wage growth or inflation, indicating that the NAIRU is no longer a reliable indicator for economic policy.
U.S. jobless claims rose slightly after reaching an eight-month low, indicating a strong labor market that continues to defy the Federal Reserve's attempts to cool it down.
The UK government plans to increase the national living wage to over £11 an hour, benefiting two million low-paid workers, while also cracking down on benefit claimants who refuse to look for work; the reforms are aimed at "making work pay." Additionally, the Child Maintenance Service will be given new powers to process maintenance payment orders for absent fathers directly, reducing processing time.
The UK is raising its minimum wage amid a global trend to alleviate financial burdens caused by declining purchasing power. France currently offers the highest real minimum wage among OECD countries, while Malta has the lowest.
The rate of pay increases for job switchers in the US has slowed to 9%, the lowest rate since June 2021, with the difference between wage growth gained by leaving a job versus staying at its slimmest margin since October 2020, according to data from ADP.
The United States is expected to add 170,000 jobs in September, which would mark the fourth consecutive month with an increase below 200,000, potentially exacerbating the labor shortage and making it difficult for the Fed to control inflation. The unemployment rate is forecast to fall slightly to 3.7%, while wage growth is expected to rise 0.3%. The impact of labor-union strikes, such as the expanded strike by auto workers, could also affect employment growth.
British employers reduced job vacancies for the first time in over two-and-a-half years in September, signaling a cooling in the labor market, although the decline was marginal and mainly in the public sector.
