The Office for National Statistics has published a report indicating a fall in unemployment. The proportion of people in work is at a record high of 73.5% since the highest comparable record began in 1971. Unemployment rate has fallen to 5.5 percent which is the lowest since before the financial crash. Employers enjoyed faster pay growth than the economists have predicted in the first quarter of this year. The Conservatives have forecasted the creation of another 2 million jobs by 2020 which would increase the employment rate to an absolute record high in the G7 group of rich countries at 76.6%.
The general direction of the movement since early 2012 has been a steady incline in employment. There were 31.10 million people in work in December 2014, a rise of 202, 000 since the previous year. The average pay excluding bonuses has risen by 2.2 percent which is the highest rise since 2011.
Similarly, the report indicates there have been slight rises in wages. This is an indication that the economic recovery is beginning to improve working conditions. For the first time in six years, the nominal pay growth is beginning to rise. Coupled with dropping inflation rates (currently at zero percent), living standards are beginning to rise again. If the forecasts of deflation are correct, British employees can expect a considerable rise in living standards.
Since a growth in wages has not been accompanied by a growth in productivity, some economists have indicated this might begin to concern the Bank of England’s Monetary Policy Committee.