Record vacancies and payrolls fuel UK rate rise speculation; rising grocery prices squeeze households – business live

Rolling coverage of the latest economic and financial newsLatest: grocery prices up; petrol crisis hits supermarket visitsEconomists: strong jobs report could prompt rate riseIntro: Unemployment dipped again in June-August…payrolls hit record highVacancies at record level over 1 millionPay growth slowed…but estimate of underlying earnings risesFidelity: Workers have more power to demand pay risesJonathan Reynolds MP, shadow Work and Pensions Secretary, points out that the UK’s long-term unemployment total (those out of work for at least a year) hasn’t improved: “Long term unemployment remains persistent and the Government’s Plan for Jobs has done nothing to alleviate supply shortages or prepare for the future.Families and businesses are facing an energy crisis, shortages and price rises because of this Government’s poor decisions and lack of planning. And now working people are being hammered by tax hikes and cuts to Universal Credit.The distortions from the furlough scheme and the change in the composition of employment that have boosted average earnings growth have now started to ease. The 3myy rate fell from 8.3% in July to 7.3% in August. But the ONS said that excluding those distortions, underlying wage growth accelerated from a range of 3.6-5.1% in July to 4.1-5.6%.That may fuel some of the concerns at the Bank of England that the rise in inflation is becoming more persistent, even though the outlook for overall economic activity has weakened since August.The end of the furlough scheme will probably help, but we’re increasingly of the view that labour shortages will last at least until the middle of next year. Continue reading...

Record vacancies and payrolls fuel UK rate rise speculation; rising grocery prices squeeze households – business live

Rolling coverage of the latest economic and financial news

Jonathan Reynolds MP, shadow Work and Pensions Secretary, points out that the UK’s long-term unemployment total (those out of work for at least a year) hasn’t improved:

“Long term unemployment remains persistent and the Government’s Plan for Jobs has done nothing to alleviate supply shortages or prepare for the future.

Families and businesses are facing an energy crisis, shortages and price rises because of this Government’s poor decisions and lack of planning. And now working people are being hammered by tax hikes and cuts to Universal Credit.

The distortions from the furlough scheme and the change in the composition of employment that have boosted average earnings growth have now started to ease. The 3myy rate fell from 8.3% in July to 7.3% in August. But the ONS said that excluding those distortions, underlying wage growth accelerated from a range of 3.6-5.1% in July to 4.1-5.6%.

That may fuel some of the concerns at the Bank of England that the rise in inflation is becoming more persistent, even though the outlook for overall economic activity has weakened since August.

The end of the furlough scheme will probably help, but we’re increasingly of the view that labour shortages will last at least until the middle of next year.

Continue reading...