UK job vacancies reach record high as pay lags

Britain's unemployment rate has risen slightly, while soaring inflation is causing the value of wages to fall at the fastest rate in more than a decade

Office workers and commuters walk through Canary Wharf in London. Unemployment rose to 3.8 percent in the three months to the end of April. PA

Job vacancies in the UK rose to a record of 1.3 million in April, officials figures showed.

However, there was a further slowdown in the rate of growth, the Office for National Statistics said.

In a welcome dose of good news on the economy, the figures showed the number of UK workers on payrolls rose by another 90,000 ― or 0.3 per cent ― between April and May, to 29.6 million.

The unemployment rate edged up slightly to 3.8 per cent in the three months to April, from 3.7 per cent in the previous three months, though it remained close to 50-year lows.

Sam Beckett, head of economic statistics at the ONS, said the figures “continue to show a mixed picture for the labour market”.

She said: “While the number of people in employment is up again in the three months to April, the figure remains below pre-pandemic levels.

“Moreover, although the number of people neither in work nor looking for a job has fallen slightly in the latest period, that remains well up on where it was before Covid-19 struck.

“Job vacancies are still slowly rising too. At a record level of 1.3 million, this is over half a million more than before the onset of the pandemic.”

Britons saw increases in their pay packets fall behind soaring inflation at a record pace as the cost-of-living crisis tightened its grip on UK households.

The ONS revealed that regular wages excluding bonuses plunged by 4.5 per cent in April when taking Consumer Prices Index (CPI) inflation into account — the biggest fall since records began in January 2001.

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It comes as inflation has jumped to a 40-year high of 9 per cent due to soaring energy and fuel bills amid the impact of the Ukraine war, and as economies emerge from the pandemic.

The ONS data showed that, in the three months to April, regular pay excluding bonuses fell 3 per cent after the impact of inflation — the biggest fall since November 2011 — despite a 4.2 per cent rise in average earnings.

Chancellor Rishi Sunak said: “Today’s stats show our jobs market remains robust with redundancies at an all-time low.

“Helping people into work is the best way to support families in the long term, and we are continuing to support people into new and better jobs."

Alice Haine, Personal Finance Analyst at online investment platform Bestinvest, said: “While unemployment holding fairly level at 3.8 per cent, a record number of people on payrolls and a record number of job vacancies might sound like a good thing, the reality is that average pay is still struggling to keep pace with rampant inflation.

“Yes, average pay growth in February to April of 4.2 per cent might feel like a bumper salary increase but these are not normal times and with inflation hitting a 40-year high of 9 per cent in April, real wages declined on average by 2.2 per cent compared to a year ago.

“It means the spending power of households is now severely compromised and with inflation expected to surge to 10 per cent or higher in the fourth quarter — when Ofgem’s energy price cap increases to £2,800 — the situation will only get worse."