Britain yet to reach employment high water mark” – reaction from senior economics fellow Tara Sinclair

TARA SINCLAIR, ECONOMIST AND SENIOR FELLOW AT THE GLOBAL JOB SITE, Indeed [1], COMMENTS:

“The addition of such a surprisingly high number of new jobs proves the UK has yet to reach the employment high water mark. Clearly the jobs boom isn’t over yet, but the economy’s ability to keep creating new jobs is waning – and the prime suspect is the UK’s stubbornly low productivity.

“British labour productivity is growing at its slowest pace for nearly two centuries, and while this problem isn’t unique to the UK, Britain’s worrying combination of stagnant productivity and falling real wages is.

“Today’s modest increase in average salaries – up just 2.4% on the same time last year – means real wage growth remains tantalisingly out of reach for millions of Britons. Even though consumer price inflation eased in December, workers’ paypackets are still not keeping up.

“While many of us made ‘get a pay rise’ a New Year’s Resolution, research by Indeed has revealed that men are much more willing than women to ask their employer for a raise. Our study also found women are three times more likely than men to be too embarrassed to ask for a pay increase.

“Ten months on from the triggering of Article 50, the wage-sapping surge in inflation is a side effect of the fall in the Pound, and the steady erosion of employers’ confidence may be due to the uncertainty triggered by Brexit.

“But the roots of Britain’s productivity problem – which is the underlying reason for the slow wage growth and a serious speed bump for the economy – run deeper and cannot be blamed on Brexit alone