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Employment engine begins to splutter as pay squeeze continues

Commenting on the latest labour market statistics from the Office of National Statistics, Ian Brinkley, Acting Chief Economist at the CIPD, the professional body for HR and people development said:

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“These figures suggest the UK's employment engine has begun to splutter. The fall in the total number of people in work, down 0.2%, is primarily driven by a fall in full-time self-employment. Coupled with a fall in unemployment, this appears to point towards constraints in the overall supply of labour rather than a decline in demand. There is a strong possibility that the continued expansion of the labour market has hit its ceiling. In response, employers would be wise to invest more in their existing workforce, especially in light of recent declines in the number of apprenticeships.

“While average earnings figures improved slightly compared to previous quarters, high inflation means that real wages continue to fall which will leave households struggling over Christmas and into the new year. The continued squeeze on living standards shows little sign of abating in the immediate future, though with inflation predicted to fall back towards 2% later in 2018 there may be some light at the end of the tunnel.”