The UK jobs market is defying gravity. For months, Bank of England officials have warned that households should expect to feel poorer, as higher energy costs and rising interest rates made employers less willing either to hire or to raise wages in line with inflation.
But the latest official data, released on Tuesday, showed workers in a position of strength. Unemployment remains close to record lows. Employment has finally climbed above its pre-pandemic level, with a record 33.1mn people in work, even if the employment rate is still lower than in 2019.
And although inflation has been eroding the value of workers’ pay since late 2021, that may be about to change. In April — the last month covered by the data — average wages, excluding bonuses, were up 7.5 per cent year on year, growing only slightly slower than inflation on the Office for National Statistics CPIH measure, which includes housing costs.