Record pay deals will worry the Bank of England

Wages are slowly closing the gap with inflation, up 7.2 per cent in the year to April versus inflation of 8.7 per cent. It adds up to a real-terms decrease. It’s the 18th real-terms fall in a row – though the fastest nominal rise on record outside the pandemic. The new minimum wage (up nearly 10 per cent to £10.42 an hour) was a factor. The economy created 250,000 more jobs with the number in employment rising to 33.1 million. This shows signs of the worker shortage crisis softening a bit – the number of people either in work or looking for it rose to 34.4 million, the highest since October 2020. Meanwhile, the number of vacancies softened to 1.05 million – down a tad from 1.08 million but still almost twice as high at any point in the previous decade. 

So the factors pulling in a record number of migrant workers in the middle of an era of mass worklessness are just as strong.