Employment record provides an early Christmas present for the new government, but economic slowdown has hit pay growth

The UK ends the decade with employment at a new record high of 76.2 per cent, but a slowing economy has hit pay growth and means that the UK enters a new decade with pay still below its pre-crisis peak, the Resolution Foundation said today (Tuesday) in response to the latest ONS labour market statistics.

The UK entered 2019 with employment of 76.1 per cent so, despite the new record employment, the big picture of 2019 is flat, but high, employment as the jobs boom of the 2010s comes to a close.

The Foundation says that the fact that the labour market has remained tight through 2019 is very welcome and fed through to stronger pay growth this year.

However, it notes that this improvement has now been impacted by a slowing economy, with GDP growth grinding to a halt in the three months to October. As a result nominal pay growth – previously heading towards 4 percent in the summer – dropped back to 3.5 per cent in latest figures at a time when British workers are still earning £1 per week less than before the financial crisis.

Nye Cominetti, Economic Analyst at the Resolution Foundation, said:

“Britain ends 2019 still hard at work after a record-breaking year of strong employment. Alongside rising pay and low unemployment, this will certainly be welcome news to the new government.

“However, the UK’s slowing economy has started to hit workers’ pay, reminding us that the labour market cannot be divorced from wider developments. Remarkably, British workers are reaching the end of the decade with their pay packets stretching no further than they did at the end of the last decade.”