Growth in average pay continued to accelerate in the latest quarter, as average pay excluding bonuses grew at its fastest rate since the end of 2008 (not adjusting for inflation). Employment and unemployment both saw modest increases compared to the previous quarter, although the unemployment rate remains very low by historical standards. Despite a large fall in employment of other EU nationals (the largest annual fall since comparable records began), employment remains well above its level last year.

Key figures

  • The UK unemployment rate was 4.1% in July-September 2018. The ILO measure of unemployment was 1.38 million people, 21,000 more than the previous quarter but 43,000 fewer than the year before.
  • The number of people in employment was 32.41 million, 23,000 more than the previous quarter and 350,000 more than the year before. The employment rate was 75.5%.
  • 8.74 million people aged 16-64 were economically inactive, little changed from the previous quarter but 147,000 fewer than the year before. The inactivity rate was 21.2%.
  • Average weekly pay for employees in Great Britain increased by 3.2% excluding bonuses in the three months to September 2018 compared with the previous year. Average weekly pay including bonuses increased by 3.0%.
  • CPI inflation averaged 2.5% over this period, meaning that average earnings both including and excluding bonuses grew faster than prices.

Revisions to claimant rates

The Library has updated the denominators used to calculate constituency claimant rates following the publication of new constituency population estimates for mid-2017 and revisions to population estimates for previous years. Denominators have also been updated to reflect recent changes in economic activity at the national and regional level.

Therefore the claimant rates in this month’s paper are not comparable with rates shown in previous editions, although in most cases the effect of the change is very small. Instead the Library’s Constituency Dashboard provides rates that are consistent over time, from May 2010 onwards.

Impact of Universal Credit on the claimant count

The claimant count figures provided in this paper are affected by the ongoing rollout of Universal Credit.  The claimant count comprises people claiming Jobseeker’s Allowance, or people claiming Universal Credit who are required to seek work. Under Universal Credit, a broader span of claimants are required to look for work than under Jobseeker’s Allowance. This has the effect of increasing the number of unemployed claimants. So changes in claimant numbers may be a consequence of the Universal Credit rollout rather than changes in economic conditions.

The effect is most visible in areas operating Universal Credit “Full Service”, where rollout of Universal Credit is more advanced. In these areas, there tends to have been a sharp increase in the claimant count following the introduction of Full Service.

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