Latest figures from the Office of National Statistics suggested that regular pay is rising at 1.9 per cent while for the economy as a whole the broader figure was closer to 2.1 per cent (excluding bonuses, 2.3 per cent with bonuses) as against inflation of more than 5 per cent.
At the same time employment figures suggest the number of people in full-time jobs was down by 1.4 per cent while those working on reduced hours or part-time increased by 5 per cent with continued bad news for under-25s of whom a million are seeking work.
Changes in the rules for lone parents’ entitlement to benefit drove significant numbers of people to claim jobseeker’s allowance as the numbers seeking unemployment jumped to their highest in more than a year.
The numbers claiming jobless benefit rose by 12,400 following an upward revision of 6,400 in March.
Overall the ONS said the number of people without a job using the International Labour Organisation measure actually fell by 36,000 in the three months to March, bringing the unemployment rate to 7.7 per cent.
Some economists have described the UK’s statistics as a conundrum as official figures suggest job creation is happening – albeit with a greater emphasis on part-time work – but against a backdrop of no growth, almost the opposite of a jobless recovery.
Meanwhile, employers expected to make up for continuing job losses in the public sector in the coming months – pleased with real terms wage falls – nevertheless face increased commodity and input costs, depressed demand and a fiscal squeeze casting serious doubts on their capacity to match those losses.
A survey by the Ernst & Young Item club predicted that depressed consumer demand will mean a decade of misery for British retailers while elsewhere economists predict the only logical outcome is sharply decreasing living standards for most ordinary households.
Former Citibank economist Michael Burke said the Government “have created stagflation and called it a recovery” as inflation strips away £34 billion of value from employees’ compensation compared to the £41 billion accounted for by already announced spending cuts and tax increases.
