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The UK labour appears to be going from strength to strength – but there are still some negatives.

Wages growth jumped to 3.6% in the year to May 2019 which is the highest rate in over a decade, according to Office for National Statistics figures.

Wage rate rises have now been higher than inflation – currently 2%-  since March 2018.  32.75 million people – a new record- were in employment up to the end of May, while 1.29 million were out of work, the lowest since at least 1992.

“The labour market continues to be strong,” said ONS deputy head of labour market statistics Matt Hughes.

“The number of self-employed part-timers has passed one and a half million for the first time, well over double what it was 25 years ago,” he added.

“Regular pay is growing at its fastest for nearly 11 years in cash terms, and its quickest for over three years after taking account of inflation.”

Why have wages grown so quickly?

Two events in April have helped to create the increase.

Firstly, some NHS staff were given pay rises, and secondly the new National Living Wage and National Minimum Wage rates increases came into effect.  Workers in industries such as wholesaling, retailing, hotels and restaurants benefited from the rate rises that effects mostly the lowest paid workers.


Average regular pay, before tax and other deductions, was estimated at £503 a week.

However its not all good news.  When adjusted for the impact of rising prices, pay is still below levels seen before financial crisis in 2008. Average pay works out to £468 a week when adjusted for inflation which is £5 less than the pre-recession peak of £473 a week recorded for April 2008.

The employment rate for men was 80.2%, up slightly from a year earlier while the rate for women was 72%, which is the joint highest since records began in 1971.

Vacancies fell to their lowest level in more than a year of 827,000 across the UK – 9,000 fewer than a year earlier and 19,000 fewer than the previous quarter.

The lower level of vacancies have been accredited by some surveys to the fact that employers are becoming more cautious about hiring in the lead-up to the new Brexit deadline of 31 October.  If however, more people choose to leave the UK after Brexit then this will create more vacancies and a lower pool of talent to fill the roles – leading to even higher wage growth.