In a report published today, the Office for National Statistics (ONS) revealed that wage growth in the United Kingdom has experienced a significant slowdown, signalling a cooling trend in the job market.
The figures, covering the period of October to December 2023, provide insights into various aspects of the labour market, including earnings, unemployment, and job vacancies.
“The labour market has slowed over the past few months, but activity levels remain resilient. Vacancies are higher than pre-pandemic and unemployment, while rising, is still at a low level by historic standards. The jobs market does now seem to be in a bit of a standoff with the wider economy, with both employers and candidates waiting to see how the economy develops before committing to new roles,” says Neil Carberry, REC Chief Executive.
Job vacancies on the decline
The estimated number of job vacancies in the UK saw a substantial decline, falling by 49,000 in the fourth quarter of 2023 to 934,000. This marks the 18th consecutive quarter of decline, setting a record for the longest continuous period of quarterly falls, although the figures remain above pre-coronavirus (COVID-19) pandemic levels.
“The headlines for the period show the UK employment rate increased by 0.1 percent to 75.8 percent. The UK unemployment rate was largely unchanged in the quarter at 4.2 percent. The UK inactivity rate decreased by 0.1 percent to 20.8 percent,” highlights Joanne Frew, global head of employment and pensions at DWF.
In October to December 2023, the estimated number of vacancies in the UK fell by 49,000 on the quarter to 934,000
“Today’s figures point to a mixed picture in the UK labour market with slowing pay growth and vacancies falling for the 18th consecutive quarter,” says Ben Harrison, Director of the Work Foundation at Lancaster University.
Growth in regular earnings
Despite the decline in job vacancies, annual growth in regular earnings (excluding bonuses) in Great Britain remained at 6.6 percent for September to November 2023.The annual growth in employees’ average total earnings (including bonuses) was 6.5 percent during the same period.
However, the real-terms growth in total pay, adjusted for inflation, rose by 1.3 percent on the year, with regular pay seeing a 1.4 percent increase.
What about days lost to strikes?
In November 2023, the number of working days lost due to labour disputes reached the lowest since May 2022, totalling 69,000. Over half of the labour disputes during that month were concentrated in the transport, storage, information, and communication industries.
The number of payrolled employees decreased
The estimate of payrolled employees in the UK for December 2023 decreased by 24,000 from the revised November 2023 figure, reaching 30.2 million. It is important to note that the December 2023 estimate is provisional and subject to revision when more data becomes available next month.
Additionally, due to increased uncertainty surrounding the Labour Force Survey (LFS) estimates, alternative series of estimates derived from administrative data were introduced. These suggest a slight increase in the UK employment rate, a stable unemployment rate, and a decrease in the economic inactivity rate for the quarter.
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at the University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.