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Round-up of the week

Posted on 17th July 2015

Government hails rise in real wages

Real wages are heading up at their fastest rate in nearly a decade, official figures have revealed.

According to the Office for National Statistiics (ONS), pay growth has reached an average of 2.8 per cent during the last year - the highest amount since 2007.

The government has attributed this largely to its long-term economic plan, stating that "hard-working people are feeling the benefit of our economic recovery - with more money in their pockets".

ONS data also highlighted a number of other positive developments, such as the fact that the number of people in work is nearly two million up on the figure recorded five years ago.

Furthermore, it showed that long-term unemployment has come down by 184,000 over the last year.

However, the British Chambers of Commerce is concerned that during the three months to May 2015, employment fell by 67,000 and unemployment went up by 15,000.

David Kern, chief economist at the business group, said this breaks a "long run of employment growth" and represents a "setback" for the labour market.

He stated that this is a reminder that the UK's economic recovery remains fragile and that more needs to be done to stimulate growth. This, he said, includes introducing measures that encourage businesses to invest and export.

Nevertheless, Mr Kern insisted that one month's worth of statistics "should not spark undue alarm", as the UK's "dynamic and flexible labour market has proven time and time again to be a source of strength for our economy".

He also stressed that the above-inflation growth in average earnings will be a boost for living standards, but said the country now needs "a continued period of stability without any threat of an interest rate rise for the time being".

CBI data reinforces official figures

The latest CBI/Pertemps Labour Market Update has backed up the ONS data by showing a drop in employment during the three months to May, when compared with the previous quarter.

But while the CBI has conceded that any fall in employment is "a worry", it believes this needs to be placed in context.

"Employment has been broadly rising since mid-2013, increasing by 265,000 in the last year alone," the CBI said.

The business group added that the drop in employment was fuelled by a slump in self-employment, rather than a decline in the number of people working for an employer.

Government to put pressure on employers to address gender pay gap

Businesses that employ at least 250 people will have to publish details of how much they pay to male and female workers from next year.

The government hopes that by highlighting how much is paid to men and women, employers will be put under pressure to address any disparity in gender pay.

According to the CBI, addressing the gender pay gap is "the right priority". However, it warned that publishing pay gap data might be misleading, which means any rules on what is published must be "flexible enough to be relevant to each company".

The CBI added that challenging occupational stereotypes by encourage more women to enter male-dominated sectors would also represent a step forward in resolving this problem.