Unemployment jumped and average wage rises dropped to their lowest on recording the three months to March, underlining concerns at the slow pace of the UK’s recovery.
There was an increase in unemployment of 15,000 in the first quarter of the year while during the same period regular pay rose by just 0.8%.
The worsening unemployment picture sent the jobless rate up from 7.7% to 7.8% and left the total number of people unemployed stuck at 2.52 million.
George Osborne has come under increasing pressure to stimulate economic growth from a wide range of critics, though they differ in their remedies especially in areas such as construction.
A report for the London Assembly this week found there are 150,000 skilled construction workers in the capital claiming jobseeker’s allowance, at a cost of £2.1bn in benefits. A similar picture of empty and half-built construction sites is repeated across the country as the industry, which accounts for 7% of economic activity, remains in the doldrums.
Total pay rises, which include bonuses, was even lower than average pay rises, said the Office for National Statistics, increasing by only 0.4% at a time when inflation remains stubbornly high at 2.8%.
Martin Back, UK economist at Capital Economics, said the labour market data provides “something of a reality check” following recent positive news on the economy.
“There was a triple whammy of bad news, with employment in the three months to March down by 43,000 and unemployment, on the ILO measure, up by 15,000. Meanwhile, the squeeze on real earnings has intensified, with average earnings including bonuses falling by 0.7% year on year in March, the first drop since 2009.”
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