Hello and welcome to our ongoing coverage of the global economy, financial markets, eurozone and business.
The UK’s cost-of-living squeeze has tightened, with base pay falling below inflation at the fastest rate in more than seven years.
The latest employment figures, which have just been released, show that the regular real wage (adjusted for inflation) fell 1% from one year to the next in the three months preceding January. This is the biggest drop in real regular wages since May to July 2014 (it also fell 0.9% at the start of the pandemic).
Total compensation increased by only 0.1% in real terms, due to strong bonuses paid over the past six months.
Wages increased in nominal terms: total compensation (including bonuses) increased by 4.8%, while regular compensation (excluding bonuses) was 3.8% in November-January 2022.
But those wage increases have been eroded by rising prices – CPIH inflation (the ONS’ preferred measure of inflation) averaged 4.8% in the quarter.
And the pressure will continue in the months to come, as rising energy and food prices drive up the cost of living. Consumer inflation should jump more than 7% by April.
The report also shows the UK unemployment rate has fallen again, to 3.9% from 4.1% three months earlier – back to pre-coronavirus levels.
But while the employment rate rose by 0.1 percentage point, to 75.6%, it was still 1.0 percentage point below pre-pandemic levels, due to the decline in work independent.
There were nearly 32.5 million people in employment, 380,000,000 more last year, but still 580,000 less than before the pandemic.
Vacancies hit a new high of 1,318,000 in the three months to February as companies struggled to fill vacancies.
The number of people on business payroll hit a new record high in February, up 275,000 to a new high of 29.7 million.
More details and reaction to follow.
Also coming today
Stock markets are nervous as Covid-19 infections rise sharply in China, raising fears that more lockdowns will be introduced to slow the pandemic.
Nationally transmitted cases more than doubled yesterday to 3,507, testing the country’s difficult ‘dynamic clearance’ approach to Covid.
Yesterday, a province of 24 million people went into lockdown, leading companies such as Apple supplier Foxconn to suspend work.
that of Hong Kong Hang Seng the index, which hit a six-year low yesterday, is down another 6% today.
European markets are expected to open lower.
Britain is set to name hundreds of oligarchs, individuals and organizations linked to Putin’s regime to be added to the UK’s sanctions list, after economic crime bill is fast-tracked yesterday evening.
Investors are also watching Russia, which faces a $117 million debt repayment tomorrow. Last night Moscow said it had started the payment process, but it is unclear whether payment is in US dollars – the currency in which they were issued – or rubles.
With much of Russia’s foreign exchange reserves frozen, it may not be able to make dollar payments, meaning it could default (after a 30-day grace period).
- 7am GMT: UK labor market report
- 7:45 a.m. GMT: French inflation for February
- 10am GMT: ZEW survey on eurozone economic confidence
- 12:30 GMT: US PPI measure of US producer prices for February