The level of people who are unemployed has fallen to the lowest since February 1974. The latest figures from The Office for National Statistics show that the unemployment level in the three months to August had fallen from 3.8% to 3.5%, which means about 1.2 million people are unemployed.
The figures also show that there is a record number of working-age adults who are not working because they are long-term sick. Almost 9 million people aged between 16 and 64 are economically inactive, a number that includes students as well as people who have long-term health problems. This means there are fewer workers available for the 1.2 million jobs available, leading to economists and employers alike to warn that this will have an effect on the UK's growth agenda.
Director of the Work Foundation at Lancaster University Ben Harrison, said: “The government is right to focus on driving growth in the economy, but it cannot do so without tackling the UK’s participation issue.
“If the prime minister is to be true to her word on ‘taking tough decisions’, her administration should drop the rhetoric on benefit claimants needing to work harder and instead focus the full power of government to support those who have dropped out of the labour market, including those not receiving universal credit.”
Another worrying figure was that, although pay has increased slightly, it has fallen behind the soaring inflation. Pay growth (excluding bonuses) was 5.4% but inflation is currently running at 9.9% in the UK, meaning that pay growth has in fact fallen in real terms by 2.9% for regular pay (or 2.4% when bonuses were taken into account).
