Labour market recovery: real pay is falling

The latest ONS data (September to November 2021) provides a snapshot of labour market activity as the UK economy opened up. There are continued signs of economic recovery with employment increasing, unemployment decreasing, and job vacancies at a new record high.

Real time Pay-As-You-Earn data for December 2021 showed that the number of employees on payroll increased once again, up by 184,000 to 29.5 million total. The uptick in employment was driven mainly by part-time workers.

Nominal pay growth remains strong by pre-pandemic standards, but it is declining across all sectors. Rising inflation has pushed real wages down and income is likely to be squeezed further due to ongoing price rises and upcoming tax changes.

To break this cycle, and deliver sustainable living standards, the UK needs a plan to unleash business investment and raise ambitions for growth through a more productive workforce.

Download the full Labour Market Update to find out:

• The impact of COVID-19 on the overall health of the UK labour market
• How wage growth and productivity are developing in different sectors as well as the UK overall.
• Where labour shortages are most acute in different sectors and regions