By David Milligan and William Schomberg
LONDON (Reuters) – Britain’s earnings have fallen sharply since February 2013 on an inflation – adjusted basis, despite a sharp drop in unemployment to nearly 50 a year, underscoring the challenges facing the UK bank.
The unemployment rate fell to a record low of 3.9% at the end of 2019 and again after 1974, falling to 3.8% in the three months from February to February.
Except for securities, average annual earnings increased from 3.8% to 4.0%, but remained below inflation – from 6.2% in February – and led to a 1.3% fall in value.
“Rising inflation casts a huge shadow over the otherwise volatile labor market,” said Nie Cominetti, an economist at the Resolution Foundation.
Compared to the pre-epidemic period, British employers are having difficulty hiring and vacancies have risen to 1.288 million in the first quarter of 2022.
The tight labor market is leading many British central bank officials to fear that the current high inflation – due to energy prices and post-epidemic supply chain problems – will take root.
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