The cost-of-living crisis has dominated our national conversations over the past year, with government desperately trying to get inflation down. Multiple issues have compounded on the issue of inflation, the COVID-19 pandemic, Russia’s invasion of Ukraine and Brexit. However, for the first time in two years average wages have risen above inflation. This is a positive sign that some of the pains of the cost-of-living crisis could be easing. Certainly, Jeremy Hunt seems to think so, saying on October 17th that it is “good news that inflation is falling while real wages are growing, so people have more money in their pockets”.
Between June and August wages rose more than the inflation rate. It is the largest growth in wages since 2001 at an annual rate of 7.8%. Large pay rises were seen in the health and social care sector, the finance and business sector and manufacturing. However, it was not good news for every sector. Construction workers only saw an increase in pay by 5.7% which was lower than the inflation rate of 6.7% for the past three months. Inflation leads to the value of one’s money declining as they can now buy less with the same amount of money. However, this has led to demands for pay increases to sustain that purchasing power and because of this pressure, wages have risen.
We should celebrate cautiously though. The inflation rate is still 4.7% above the Bank of England’s goal of 2%. However, compared to the 10.1% rate of inflation in January 2023 it is a positive sign. Additionally, there is a concern that increasing wages can end up having an inflationary affect, so this must be carefully monitored.
Increasing wages are a relief to many, but what does this mean for the jobs market? Well, it can make things a bit tougher for those seeking out new ventures. The main issue that arises is the falling employment opportunities and job vacancies available. This is because employers are spending more on the salaries of employees they already have. The Office of national Statistics showed the number of job vacancies between June and September was 988,000, a decrease of 43,000 from the previous three months. This becomes the 15th period in a row a decrease in job vacancies has occurred. Some economists predict due to this, as well projected interest rates rising, wage rises could be less significant in the upcoming months and that this does not mean wages will continue to rise. If inflation continues to fall and the cost-of-living issues ease, pay rises will not be as important for households to get by.
If you are currently job hunting, do not get disheartened. Fewer job vacancies may make competition more fierce but it does not mean that there are not opportunities out there, especially in the Financial Services industry. It is important that in the current job market you make sure your credentials and interview prep is brushed up. If you want to read more about how to be best prepared for applications and interviews check out our article on transferable skills and interview preparation.
If you are currently looking for a job in the Financial Services, check out our jobs page to stay up to date with all the latest opportunities.