Thousands of low and moderate earners are opting out of pension saving as they struggle to make ends meet after a sharp increase in deductions from their pay packets was introduced in April.
The underlying opt-out rate has risen from 7.98 per cent to 8.18 per cent in the past two months, according to Now Pensions, the first big auto-enrolling master trust to disclose the impact of the contribution changes.
The increase in employee deductions has been seen as a key test for auto- enrolment — the government’s campaign to “nudge” millions of low earners into pension saving for the first time.
Auto-enrolment is seen as a success, with about nine million people starting to save for the first time since 2012, when it began to be phased in. However, the initial employee contribution was set at only 1 per cent of qualifying earnings, defined today as earnings in excess of £6,032, leading to concern that more people would opt out when the rate was tripled from April.
Now Pensions, an offshoot of the Danish state pension scheme, runs auto-enrolment schemes for 30,000 employers in the UK, most of them small businesses but also a handful of larger ones, such as Fitness First, the gyms group, and Cineworld, the cinemas chain.
The company, which is one of the biggest platforms with 1.75 million saving customers, said that 23,800 people had opted out in the two months since deductions had been raised. That was 1,750 more people than it would have expected if the opt-out rate had remained at the previous year’s level, according to Adrian Boulding, head of policy at Now Pensions.
The opt-out numbers include new recruits to client employers who bale out from the pension scheme in the first six weeks of their employment, as well as existing employees previously enrolled in the scheme who change their minds.
“A small number of people have been deterred by the increase in deductions, but the numbers demonstrate that the vast majority are sticking it out,” Mr Boulding said.
Another test of auto-enrolment comes next April, when the minimum employee contribution is due to rise to 5 per cent. Minimum employer contributions were raised from 1 per cent to 2 per cent in April and will be raised to 3 per cent next April.
The squeeze on real incomes over the past year, as inflation overtook wages growth, was another reason that the increase in deductions could have pushed more low earners to opt out.
Two factors softened the blow for many low-paid employees. One was the 4.4 per cent rise in the national living wage from £7.50 an hour to £7.83 in April. The other was a rise in personal allowances for income tax and national insurance from April.
Separate data yesterday from the Department for Work & Pensions showed that the percentage of eligible employees participating in a workplace pension scheme was 84 per cent last year, up from 77 per cent in 2016. However, the proportion saving most of the time has fallen. The percentage saving in at least three of the past four years fell from 77 per cent to 73 per cent.
There were huge improvements in the participation rate in hotels and restaurants, up from 27 per cent in 2012 to 77 per cent, and in farming and fisheries from 44 per cent in 2016 to 68 per cent.
All employees over the age of 22 have to be enrolled in a workplace scheme of minimum standards and must opt out to avoid having their pay deducted.
Large companies should be required by law to publish information on their parental leave and maternity pay policies, MPs will say today.
Jo Swinson, the Lib Dem deputy leader, is leading a cross-party push to bring a private member’s bill that would force businesses with 250 or more staff to be transparent about their arrangements.
Nicky Morgan, the former Tory cabinet minister, Harriet Harman, David Lammy and Gareth Thomas from the Labour Party, Caroline Lucas, the Green Party’s co-leader, and Alison Thewliss of the SNP are among the bill’s sponsors. Statutory maternity benefits in the UK are far less generous than in many other European nations. For the first six weeks of leave women are entitled to 90 per cent of their regular pay, while in the subsequent 33 weeks they are entitled to £145.18 a week.
The government introduced shared parental leave in April 2015, but while 285,000 couples are eligible each year, take-up is estimated to be as low as 2 per cent. The financial implications are thought to be partly to blame because although you can share 37 weeks of pay entitlement (at a maximum of £145.18 a week), fathers are not entitled to six weeks at 90 per cent pay.
Many companies offer more generous packages, but fail to publicise their arrangements. Ms Swinson said that forcing big companies to be more transparent would give them an incenitive to improve their offer.
She said: “Each year 54,000 women lose their jobs because of pregnancy and maternity discrimination, and men cite concern about negative treatment in the workplace as a significant barrier to taking shared parental leave.
“Asking large companies to publish information about their parental leave and pay policy is a simple, light-touch regulatory change that would have significant benefits. Greater transparency would reduce the risk of discrimination in the recruitment process and encourage employers to improve their parental pay policies.”
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Bosses must not ask women to wear high heels or wear their hair in certain styles, the government has said.
Requirements regarding a woman’s appearance were likely to be unlawful if there was no equivalent requirement for men, the guidance from the Government Equalities Office said. It added that dress codes should not be a source of harassment, such as “women being expected to dress in a provocative manner”.
However, a code requiring all staff to “dress smartly” would be lawful, provided the definition of smart was reasonable, “such as a two-piece suit in a similar colour for both men and women, with low-heeled shoes for both sexes”. The guidance adds that it is likely to be unlawful to require female staff to wear high heels because there is no male equivalent.
Employers are also urged to be “flexible” over religious symbols and not to ban them if they do not interfere with an employee’s work.
Dan Begbie-Clench, a partner at the law firm Doyle Clayton, said that the guide was “common sense” and reflected “recent trends in the courts and society”.
However, Beverley Sunderland, managing director of Crossland Employment Solicitors, said that the advice was too vague, describing it as a “Janet and John” guide.
Unemployment could be heading down to levels last seen in the 1950s, according to a new analysis of Britain’s jobs market.
The jobless rate has plunged since the financial crisis to a four-decade low of 4.2%. A study by Oxford Economics suggests it could have a lot further to fall, potentially recreating the golden era of the postwar boom.
Martin Beck, a senior economist at the consultancy, said there were “striking parallels” between today and the period when unemployment was less than 3% for two decades. The rate touched an all-time low of 1% in mid-1955, shortly after Anthony Eden succeeded Winston Churchill as prime minister.
Then, as now, pay rose more slowly than productivity, reducing the cost of hiring workers and ensuring a low “equilibrium” rate of unemployment — the level at which there are so few people looking for work that wages begin to rise.
Second World War servicemen were promised jobs when the hostilities ended, and successive governments made full employment a priority. Trade unions were persuaded to exercise pay restraint to ensure everyone who wanted work could find it.
Beck detects a similar dynamic in the lost decade of pay growth since the financial crisis. This time, however, the cause is the decline of unions and the threat of jobs being moved overseas or replaced by robots, he said.
“With globalisation and automation, workers just don’t have as much power to bargain for higher wages,” Beck explained. “If the factors holding back pay were to persist, alongside a catch-up in UK productivity, a return to a 1950s and 1960s-style jobless rate is possible.” With unemployment at its lowest since the mid-1970s, many economists — including members of the Bank of England’s monetary policy committee (MPC) — expect wages to pick up. Average pay growth accelerated to 2.8% in February, the first time wages have outstripped inflation in a year.
Beck, however, thinks the similarities with the postwar era suggest the return of pay growth is not a done deal. His findings echo a recent paper co-written by former MPC member David Blanchflower, arguing that the UK is far from full employment. Blanchflower, who left the MPC in 2009, said workers were “frightened” to ask for higher pay.
Britain’s employment rate has hit a record high, joblessness is at a 43-year low and wages are rising in real terms for the first time in a year, according to official figures.
With strong job creation, the labour market has been an economic bright spot for years but pay has been weak and the spike in inflation after the Brexit vote affected living standards.
Real earnings started shrinking a year ago, when inflation overtook pay, but the Office for National Statistics says that the trend was reversed in the three months to February. Earnings grew 2.8 per cent while inflation dropped to 2.7 per cent.
Wages are watched closely by economists because consumer spending, one of the key drivers of GDP, is dependent on household finances. The Bank of England is also following pay for signs of inflation before raising interest rates. It is expected to lift them a quarter point to 0.75 per cent next month.
Beyond pay, the broader employment figures provided reason for optimism. The employment rate, which measures the proportion of Britons available for work, hit 75.4 per cent, the highest since records began in 1971 and the third highest among G7 advanced nations. Some 32.26 million Britons have jobs, the highest number ever.
Unemployment fell 16,000 between November and February to 1.42 million, pulling the jobless rate down from 4.3 per cent to 4.2 per cent — its lowest since 1975. Job vacancies remained at roughly 815,000, suggesting that unemployment will continue to fall in the months ahead.
Ian Stewart, the chief economist at Deloitte, said: “For the first time in a year, earnings growth has outstripped inflation. With more people in work than ever, and three quarters of a million unfilled jobs, the stage is set for further rises in earnings through this year.”
Esther McVey, the secretary of state for work and pensions, said: “Another milestone for employment has been reached under this government as employment reaches a record high, up 3.2 million since 2010, the 16th time the employment record has been broken in the same period,” she said.
“That means on average over 1,000 people have moved into work every day since 2010, and credit has to be given to the businesses who have created those jobs and the individuals who are taking those opportunities.”
Philip Hammond, the chancellor, claimed that record employment should help fix the UK’s chronic productivity problem. “We should expect record levels of employment to drive the productivity performance of the UK economy,” he said.
The numbers made an interest rate rise almost certain. “A lot of the detail in the report suggests the labour market is still tightening,” Philip Shaw, an economist with Investec, the banking group, said. “There’s nothing within the numbers to prevent the Bank from raising interest rates in May,” he said.
Bosses reluctant to give inflation-busting rises despite struggle to hire enough staff!
Employers expect to hand out pay rises of only 2% this year, according to a new survey of 2,000 firms — a blow to workers who have seen their incomes squeezed by inflation over the past year.
The quarterly survey by the Chartered Institute of Personnel and Development (CIPD) due to be published tomorrow, is the latest sign that bosses are reluctant to hand out inflation-busting pay deals despite labour shortages in many sectors.
Figures from the Office for National Statistics this week are expected to show average weekly pay climbed 2.5% in the year to February, the same rate as January and below the current inflation rate of 3%. Unemployment is set to stay at a four-decade low of 4.3%, according to City forecasts.
“So far there’s no tangible sign that wage settlements are picking up,” said Gerwyn Davies, senior labour market analyst at the CIPD.
The gloomy picture painted by the CIPD research counters a rosier view coming from the Bank of England, which in its own survey last week said wages were set to rise by 3.1% in 2018.
Many economists are sceptical about the Bank’s optimism, given that previous forecasts of an explosion in wages have not materialised. In May 2016 Threadneedle Street was predicting pay growth of 3.75% for 2017. Wages in fact climbed 2.5% last year.
Despite record numbers of people in work, the supply of workers has been boosted in recent years by older workers staying on in the jobs market, part-timers taking on more hours, and the arrival of migrants, said Davies.
A slowdown in immigration from the EU since the Brexit referendum could add to the upward pressure on pay. The latest quarterly immigration figures are published by the ONS on Thursday and are expected to show a further slowing of arrivals from the Continent.
Industries that rely on EU workers, including hospitality, agriculture and construction, claim they are struggling to hire enough staff.
However, employers are reluctant to boost pay to attract the workers they need, preferring to squeeze more from their existing workforce or invest in training, Davies said.
The uncertainty of Brexit has also left some firms nervous about their ability to take on higher costs.
“A lot depends how much firms are able to pass on wages in the form of higher prices,” said George Buckley, UK economist at Nomura. “It does look like wages are set to pick up, but the jury’s still out.”
With EU workers leaving jobs Britons don’t want to take, employers are scrabbling for solutions.
It used to be pretty easy for Alex Wrethman to find chefs. The restaurateur would stick an ad online and wait for the CVs to flood in. These days, he must work a lot harder — and even fight rivals for good staff. “It’s such a tough market, we need to get competitive,” he said. “You don’t necessarily want to walk into a restaurant round the corner and start dropping business cards, but if that’s what it takes . . .”
Wrethman estimates 10% of the positions at his three upmarket bistros are vacant, and describes marathon three-day sessions trawling LinkedIn for candidates. He draws parallels with the football transfer market, describing one of his managers as “a bit of a Mourinho” for his aggressive “tapping up” of chefs from other restaurants.
Wrethman’s west London business, Charlotte’s Group, is far from alone in its struggle to find staff.
Britain is hiring. There are a record 810,000 vacancies in the jobs market, according to the latest figures from the Office for National Statistics (ONS). With the unemployment rate at a four-decade low of 4.3%, a slowdown in the number of EU migrants coming to work in Britain is giving many businesses the jitters. Industries from housebuilding to fruit-picking complain of recruitment problems.
One element is missing from this job-seeker’s nirvana, however: the prospect of a pay rise. Traditionally, such “tightness” in the labour market has encouraged wages to shoot up, but average weekly pay grew by 2.4% last year, an improvement on recent performance but still well below the current 3% inflation rate.
Some forecasters — including at the Bank of England — say an acceleration is around the corner. Companies expect pay to rise by an average of 3.1% this year, the fastest growth for a decade, according to the latest survey by the Bank’s regional agents. Yet sceptics say we have been here before: over the past few years Threadneedle Street has consistently forecast a wage explosion that has not materialised. The glacial pace continues to confound economists’ models.
“To a remarkable degree, wages haven’t taken off,” said Paul Johnson, director of the Institute for Fiscal Studies. “There’s a big macro question: why is the British labour market working as it is?”
Wrethman’s experience offers some clues. The hospitality industry has arguably been hit hardest by shortages of workers. According to the ONS, 4.5% of all jobs in food and accommodation services are vacant, the highest rate of any sector. The problems are particularly acute in London and southeast England, where the reliance on chefs and waiters from the Continent has been greatest.
Doubt about their status after Brexit means “the Europeans who are already here are feeling uneasy about the future”, said Wrethman, 37.
That uncertainty, coupled with the weaker pound, has made it all but impossible to attract new staff from the Continent. At the same time, bosses bemoan the reluctance of British workers to pursue careers in the hospitality industry. Surely both the “skills gap” — a mismatch between native workers’ qualifications and the needs of industry — and the unwillingness of Britons to apply for certain jobs could be fixed by a pay rise?
“The idea of a skills shortage is a difficult one for economists,” said Len Shackleton, professor of economics at Buckingham University and a research fellow at the Institute of Economic Affairs, a free-market think tank. “You wonder about stories saying we need more people to pick strawberries or build homes. Why don’t the wages just rise?”
London restaurateurs say pay for chefs and less skilled roles such as kitchen porters has recently risen faster than inflation. There is little evidence of this at a national level, though: ONS figures show rates of wages growth lower than inflation in food and accommodation services over the past 12 months.
Across-the-board pay increases would mean bigger bills for customers, a tough sell in such a competitive industry.
A Brexit-induced skills shortage is more likely to put restaurant chains out of business than lead to higher pay, argued Ewan Venters, boss of Fortnum & Mason, the upmarket London department store that has had a staffing crisis in its restaurants.
“There’s an assumption that if business didn’t go and hire cheap labour from the EU, Brits would earn more,” Venters said. “But it’s not a question of going to Europe to find cheap labour; it’s a question of getting the volume of people who want to work in the sector.”
There is evidence across many sectors that better wages have failed to address longstanding recruitment difficulties, according to Heather Rolfe, a social policy analyst at the National Institute of Economic and Social Research.
Rolfe said low-skilled sectors such as food processing were already feeling the strain because of rises in the national minimum wage. “[Food processing] has to be located where the crops are grown, which is often in areas without many people. Migrants have generally been more willing to move around. There’s little sign that British workers will, even for slightly better rates of pay.”
Last week, Herefordshire-based Haygrove, one of the country’s biggest berry and cherry growers, said it would move part of its business to China because it cannot find enough fruit pickers here.
There are similar issues in some skilled sectors. John Tutte, chief executive of the construction company Redrow, said a shortage of bricklayers could put the government’s housebuilding targets out of reach, despite annual pay increases of more than 10% in the past few years.
“There’s been a skills shortage for years,” said Tutte. “It’s always been difficult to grow a skilled workforce in such a cyclical industry.”
The average salary for a bricklayer is £36,679, according to the website totaljobs.com, but they reportedly make more than £60,000 in locations where demand is high.
Tutte said Redrow has as much trouble recruiting in northern England, where the construction industry employs comparatively few EU workers, as it does in London and the southeast.
Like bosses in the restaurant business, he blames an image problem for the shortage of British recruits. “Workers in housebuilding are not badly paid — there’s no one on the bread line. But how much attraction to be a bricklayer is there among young people? Do they want to be on a site on a wet February morning?”
Redrow recently established Britain’s first housebuilding degree at Liverpool John Moores University, a move Tutte hopes will lend some academic prestige to the sector.
The government has pinned its hopes of plugging the skills gap on apprenticeships. Unfortunately, its flagship apprenticeship levy is turning into a disaster, with numbers of those starting an apprenticeship down 27% this academic year. Many companies complain the funds raised by the levy do not cover training costs, while small firms say they are struggling to navigate the system.
“We train people anyway, but the training we do doesn’t necessarily fit into the format demanded by the apprenticeship levy,” said Tom Molnar, founder of the London bakery chain Gail’s. “We have to put a lot of effort into figuring out how it works. It’s a policy with serious flaws.”
If apprentices won’t save the day, how about robots? A raft of politicians, including the chancellor, have suggested a lack of cheap labour could spur automation — helping improve Britain’s woeful productivity record in the process.
There are two problems, however. First, the most acute staff shortages are in industries least amenable to automation, such as hospitality. Second, much of the low-hanging fruit has already been harvested — witness the self-service checkouts in supermarkets. It is hard to imagine Britain’s notoriously investment-shy industries dropping many millions of pounds on expensive new kit when the future of the economy is so uncertain.
Hungry for staff, some bosses are trying more old-fashioned recruitment techniques. “A few months ago, for the first time ever, we began putting signs in shop windows saying ‘Join us’,” said Molnar.
Millions of workers in the gig economy are set to receive new employment rights, including the enforcement of holiday and sick pay, under reforms to be announced today.
Theresa May will say that Britain will become one of the first countries to tackle the challenges of the changing world of work, pledging to help to create better, higher-paying jobs.
Ministers are responding to a review headed by Tony Blair’s former policy director, Matthew Taylor, into rights for gig economy workers. The government said it was proceeding with almost all recommendations including giving zero-hour and agency workers the right to request a more stable contract.
Ministers said that they planned to go further than the review’s proposals by enforcing workers’ holiday and sick pay for the first time, ensuring day-one rights such as holiday and sick pay entitlements and a new right to a payslip.
About 1.2 million agency workers will be entitled to a breakdown of who pays them and any costs deducted from their wages, while the Low Pay Commission will be asked to consider higher minimum wage rates for those on zero-hour contracts.
Labour criticised the government for launching consultations rather than taking immediate action while the TUC said it had taken a “baby step, when it needed to take a giant leap”. Industry figures questioned whether the government would be able to draw up a legally tight definition of “workers”.
Laws allowing agencies to employ them on cheaper rates could also be repealed, while some employment tribunal fines against employers will be quadrupled to £20,000.
A consultation will be launched to see whether laws are needed to make it easier to understand if someone is an employee, worker or self-employed, an issue that has led to a series of employment tribunal cases in recent years.
The government response will also shelve permanently plans to hike national insurance contributions for the self-employed. One business group complained that today’s announcement did not include the challenge for the self-employed of applying for mortgages and insurance products.
“It’s disappointing that these challenges have once again not received a mention,” the Federation of Small Businesses said.
Mrs May said: “We recognise that the world of work is changing and we have to make sure we have the right structures in place to reflect those changes, enhancing the UK’s position as one of the best places in the world to do business.
“We are proud to have record levels of employment in this country but we must also ensure that workers’ rights are always upheld. Our response to this report will mean tangible progress towards that goal as we build an economy that works for everyone.”
The TUC’s general secretary, Frances O’Grady, added: “These plans won’t stop the hire-and-fire culture of zero-hours contracts or sham self- employment, and they will still leave 1.8 million workers excluded from key protections.”
Torsten Bell, director of the Resolution Foundation think tank, said: “The government is right to be taking concrete measures to boost enforcement of our labour market rules and to increase the fines for employers who break them too often.”
Rebecca Long-Bailey, the shadow business secretary, said: “Launching four consultations and merely ‘considering’ proposals is not good enough. Like so much from this government, today’s response is just more words with no real action to improve the lives of the millions of people in insecure work.
“Theresa May’s failure to strengthen workers’ rights is having a real impact on people’s lives. Only recently we heard of the devastating case of a gig economy worker who died after being fined by DPD [parcel deliveries] for attending urgent medical appointments.
“Labour warned the review did not go far enough, and yet the government has failed to adequately meet even the most basic of recommendations.”
Employees are missing out on a valuable tax perk that cuts the cost of financial advice by up to £310 a year.
Launched last November, pension advice vouchers are a government initiative similar to childcare vouchers and the cycle to work scheme. But they have gone largely unnoticed, with few companies offering the benefit to workers.
Staff are entitled to swap up to £500 of their pay each tax year for a pension advice voucher through a salary sacrifice scheme. The voucher can be used to obtain financial advice about any sort of pension the employee has; it does not have to be about their company scheme.
Depending on the employee’s wages, the voucher costs them as little as £190, thanks to the tax and national insurance saved.
“Very few employers are offering the scheme, hence few employees are aware of it,” said Adam Price, founder of the financial adviser review website VouchedFor.
“Access to good financial advice is so important right now — and this government initiative reduces the cost by up to 62%. I would urge all employees to lobby their employers for access to this scheme.
“It’s especially urgent for the 1.2m employees who already pay for advice each year; they have only until April if they want to capture their first year’s savings.”
The £500 advice voucher broadly costs £340 for basic-rate taxpayers and £290 for higher-rate payers. For those earning £100,000-£123,000, it costs just £190. Workers earning above this pay £210.
Brian Henderson, partner at the human resources consultancy Mercer, said there were “few, if any” employers offering the benefit. “The scheme can work really well in principle, but we haven’t seen masses of interest,” he said. “If employees want it they should argue very heavily that they want it in place.
“There’s an underlying challenge with employers offering an advisory service such as the vouchers and highlighting advisers to choose from, as they worry the advice could go wrong and they’re on the hook for it.
“Also, there’s probably just a lack of knowledge. It hasn’t been well publicised.”
Workers can use the voucher with any financial adviser; they do not have to use one chosen by their employer. According to HM Revenue & Customs, the advice can be about financial and tax issues relating to “pension arrangements or pension funds, allowing individuals to make informed decisions about saving for their retirement”.
The advice can cost more than £500. Anything above this will be taxed and incur national insurance as usual. Workers with more than one employer can benefit from several vouchers in a tax year, gaining one voucher from each employer who provides the scheme.
VouchedFor offers a pension advice salary sacrifice scheme available to employers. Clients that have already paid for financial advice can submit a request via the website pensionadvicevouchers.co.uk. It will then contact the client’s employer to see if it wants to set up the scheme.
The £500 limit replaces old rules whereby employees were allowed a tax-exempt benefit of £150 of pensions advice a year.
Emma Roberts of JLT Employee Benefits believes more companies may start offering the perk after April, as employers traditionally review their benefits arrangements at the start of each tax year.
“By the time the increased limit was confirmed in legislation, most companies will have already been well down the line of finalising any new benefits for the year,” she said.
Another scheme connected to pensions advice was launched last year. Since April, savers of any age can withdraw three tax-free instalments of £500 from their pension pot to pay for advice. This £1,500 is on top of the 25% tax-free lump sum savers can typically access when they retire.
As with the pension advice vouchers, few people seem to have heard of this allowance. Pension providers are not required to offer the facility. Many are not offering it and, as a result, take-up appears low across the industry.
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Britain’s employment rate has risen to a record high, quashing recent fears that the job boom may be coming to an end and sending the pound to its highest level since the Brexit vote.
The number of people in work rose by 102,000 between last September and November, taking the total employment number to a record 32.2 million and stunning economists who had been expecting a fall of 13,000.
James Athey, an investment manager at Aberdeen Standard Investments, said that the figures demonstrated that the economy was “on a firmer footing than many had anticipated following the EU referendum vote”.
The Office for National Statistics said that the employment rate was now 75.3 per cent, the joint highest level since records began in 1971, as Britain continued a remarkable period of job creation that began in 2012.
The figures are likely to dispel concerns about a loss of momentum in the labour market that was seen in the previous two months. Figures for October revealed that the number of people in work had fallen by the largest amount in almost three years, but economists are now treating this as a blip.
John Hawksworth, chief economist at PWC, said: “Today’s labour market data showed the UK jobs engine kicking back into life.”
Alan Clarke, an economist at Scotiabank, called the figures a “staggering bounce back after a couple of mediocre months”.
The unemployment rate remained at a 42-year low of 4.3 per cent. There were 1.4 million people unemployed between September and November, 160,000 fewer than a year earlier, and the lowest rate since 1975.
The demand for workers shows no sign of abating. The number of vacancies jumped to a record high, increasing by 17,000 to 810,000 compared with the previous three months. The biggest demand for staff was in social work, wholesaling and car mechanics.
Previous analysis by the Bank of England has suggested that vacancies can often be artificially high, however, because it costs little to advertise for staff. Often employers are merely fishing for better workers. Employers also appear to be leaning towards employing workers permanently rather than for temporary work. The number of full-time jobs rose by 173,000, while jobs that were part-time or self-employed fell by 89,000.
The issue of sluggish wage growth continues to be a dark cloud. Average weekly earnings excluding bonuses rose by an annual rate of 2.4 per cent in the three months to November. This was below the rate of inflation, which reached a near six-year high of 3.1 per cent in November, and means that wages fell by 0.5 per cent in real terms compared with a year earlier.
Stephen Clarke, research and policy analyst at the Resolution Foundation, a think tank, said: “While the squeeze is likely to ease in the coming months, we’re still £15 below the 2008 peak for average weekly earnings.”