Job vacancies outpace unemployment for first time

There are more job vacancies than unemployed people in the UK for the first time since records began.

The unemployment rate fell to 3.7% between January and March, its lowest for almost 50 years, as job openings rose to a new high of 1.3 million.

However, wages, excluding bonuses, failed to keep pace with rising prices, a problem expected to intensify because of growing food and fuel costs.

The figures show "a mixed picture" said the Office for National Statistics.

"Total employment, while up on the quarter, remains below its pre-pandemic level. Since the start of the pandemic, around half a million more people have completely disengaged from the labour market," said Darren Morgan, director of economic statistics at the ONS.

"However, job vacancies are still rising, reaching yet another record high."

The figures showed that there was a rise in the number of people moving from economic inactivity - classed as those aged 16-64 who haven't been working or seeking a job - into employment.

At the same time, people moving from job-to-job also reached a record high "driven by resignations rather than dismissals", said the ONS.

But Ben Harrison, director of the Work Foundation think tank at Lancaster University said: "Despite employment continuing to rise, today's figures underline the challenges facing workers who are seeing inflation eat away at their living standards."

Wages when adjusted for the impact of rising prices, dropped by 1.2% in the biggest fall since 2013.

Pay, excluding bonuses, rose by 4.2% between January and March but failed to keep up with the rising cost of living - which hit 7% in March and is expected to go higher.

Some sectors such as construction and financial services benefitted from bonus payments as firms rose pay to recruit staff. This saw total pay, which includes bonuses, rise by 7% between January and March, keeping pace with rising prices.

• Bank chief in 'apocalyptic' warning on food prices
• Warning of economic downturn as interest rates rise

Mr Morgan said: "Continued strong bonuses in some sectors such as construction and especially finance mean that total pay is continuing to grow faster than prices on average, but underlying regular earnings are now falling sharply in real terms."

Chancellor Rishi Sunak said: "I understand that these are anxious times for people, but it's reassuring that fewer people are out of work than was previously feared."

But Liberal Democrat Treasury spokesperson Christine Jardine said: "These figures confirm families are facing a cost of living nightmare, with wages failing to keep up with soaring energy bills and food prices."

Looking ahead, Jake Finney, economist at accountancy firm PwC, said the jobless rate could begin to tick higher.

"We expect that unemployment could start to rise towards the end of this year, as headwinds from the war in Ukraine reduce demand for labour.

"The delayed impact is because the labour market tends to lag behind the rest of the economy".