Living standards set to plummet

Living standards are set to take a beating. In his Spring Statement, chancellor Rishi Sunak acknowledged that although nominal wage growth was 4.8% in the three months to January, the Office for Budget Responsibility expects it to average 3.3% in future.

With “real wages” (even based on CPI inflation — see column opposite) only 3% above pre-pandemic levels, it is a recipe for one of the sharpest falls in living standards for years.

Unemployment is below its pre-pandemic rate, running at 3.9% in the three months to January.

But while the total number of employees on payroll is now over 600,000 above pre-pandemic levels, self-employment is still well down.

There are 420,000 more inactive workers aged 16 to 64 compared with the three months to February 2020.

With 1.3 million vacancies, the “unemployment to vacancy ratio” has been pushed to a record low.

A rise in those reporting long-term sick is seen as one of the main drivers.

But the government also has its sights on 1.7 million Universal Credit claimants in the “searching for work” group.

The time allowed for them to search for a job in their preferred sector — or face the prospect of sanctions — is to be slashed from three months to a maximum of four weeks.

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours