Responding to today’s ONS figures, Jonathan Boys, labour market economist for the CIPD, the professional body for HR and people development, comments:

“Consumer confidence is waning, and forecasts of many economic indicators look gloomy, but the labour market remains in rude health. Businesses continue to post a record number of job vacancies, but candidates remain in short supply. Indeed, for the first time ever there are fewer unemployed people looking for work than there are vacancies.

“Most of today’s statistics relate to January to March 2022 so it’s like looking at the economy in the rear-view mirror while driving into a storm. Every successive forecast to inflation seems to climb a little higher, increasing the gap between wage growth and price growth. For now, regular pay (excluding bonuses) is growing slower than prices are growing. Those who benefit from a bonus are more fortunate. Total pay (including bonuses) is beating inflation and grew by 7%.

“As the earnings data show, the squeeze is hitting some harder than others. The difference between total pay growth in the private and public sectors – 8.2% and 1.6% respectively – is stark. Further help from government is inevitable and this should be targeted where need is greatest.

“Many businesses rightly feel a moral obligation to alleviate the squeeze on their workforce. If pay increases aren’t possible, employers should look at other measures they can take to improve financial wellbeing. CIPD research finds that employees working in a company with a financial wellbeing policy report being more likely to feel in control of their finances. However, just 18% of organisations currently have a financial wellbeing policy. CIPD research also shows that organisations could make employee benefits work harder. Several so-called ‘fringe’ benefits that help offset the cost of housing, travel and childcare can be of particular value to those on the lowest incomes.”

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