Britain: Unemployment at a low of almost 50 years

Its percentage unemployment in Britain fell the first three months of the year to its lowest level since 1974, but its rise inflation led to the largest annual decline in real income of most employees since 2013, according to the latest official figures.

Unemployment fell to 3.7% from 3.8% – lower than forecast by analysts at a Reuters poll which estimated it would remain stable – and the number of unemployed was lower than the available jobs for the first time with based on the recorded data.

The Bank of England is watching the strength of the British labor market with caution as it fears that the higher-than-usual wage increase is a key route through which current inflation growth may be consolidated.

Inflation stood at 7.0% in March and official data announced yesterday (18/5) showed that it rose to 9% in April.

The fears of the Bank of England

The Bank of England expects further price increases to push the economy closer to recession by the end of the year, leading to rising unemployment.

Today’s figures show wage increases in some sectors, with the benefits of a tight labor market unevenly distributed. Bankers and construction workers are doing well, while public sector workers are facing the biggest pay cuts.

Total earnings in the first quarter were up 7.0% from a year earlier, well above economists’ average increase of 5.4% as companies resorted to the bonus solution to attract or retain staff. . Regular earnings increased only marginally above expectations, by 4.2%.

Adjusted for inflation, the base wage was 2.0% lower than a year earlier, the biggest drop from three months to September 2013.

Governor Andrew Bailey has said that the decline in living standards is inevitable due to the shock in energy prices and that the pressure for higher wages will disproportionately benefit workers who are already in a strong position in the labor market.