Pace of wage increases slows but unemployment rate unchanged
The pace of wage growth has eased back from a record level, according to official figures that showed a resilient labour market despite the stalling economy.
The Office for National Statistics (ONS) reported that average wages excluding bonuses were 7.7% higher than a year earlier in the three months to September.
That was down from the revised 7.9% level registered last month but meant that wages were still rising by 1% after taking the rate of inflation into account.
The ONS said it was the highest rate for real wage growth for two years though economists declared that the data was a clear sign that wage growth was slowing – raising the chance of an earlier than expected interest rate cut by the Bank of England next year.
The easing in the headline wage figure, while slight, will be welcomed by rate-setters who see high pay growth as an inflationary threat.
That is because improved spending power tends to boost demand, and therefore price growth.
The Bank has twice held off on a further interest rate rise since September due to evidence its 14 consecutive hikes, aimed at taming the pace of price increases, is having the desired effect.
The employment data, though, is complicated by the fact that it currently comes with a big health warning.
The ONS is working hard to bolster participation rates for its Labour Force Survey, which is the backbone of the employment figures.
Falling response volumes have knocked the perceived accuracy of the estimates.
The ONS has responded with a series of measures including the return of in-home interviews and re-contacting households that fail to respond.
The problems mean that for a second successive month, the report is incomplete.
It is a crucial tool for providing an overview of the UK labour market and forms a big part of decision making at the Bank of England when deciding interest rate levels.
The decline in the wage figure was mainly explained by one-off payments to NHS staff, made in June, falling out of the calculations.
At 7.7%, it remains above the rate of inflation though that is widely tipped to fall dramatically when the figures covering the year to October are released on Wednesday.
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BoE: Inflation is ‘still too high’
Economists polled by the Reuters news agency see the consumer prices index (CPI) measure easing to 4.8% from the current level of 6.7%.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “Much slower wage growth is increasing the chances of a rate cut in H1 (first half) 2024.”
He explained: “Month-to-month growth in average weekly earnings excluding bonuses slowed to 0.24% in September – or 2.9% on an annualised basis – well below the 0.64% average increase in the first eight months of 2023.
“September’s pace is broadly consistent with the 2% inflation target, given trend productivity growth of almost 1%.
“What’s more, the month-to-month change was boosted by sharp increases in pay in the public sector; private-sector wages rose by just 0.13%, or 1.6% on an annualised basis.”
The wider ONS figures showed the UK’s unemployment rate remained static at 4.2% despite the stalling economy – hurt by the Bank’s action to raise borrowing costs.
Darren Morgan, ONS director of economic statistics, said: “Our labour market figures show a largely unchanged picture, with the proportions of people who are employed, unemployed or who are neither working nor looking for a job all little changed on the previous quarter.
“The number of job vacancies fell for the 16th straight month. Nevertheless, vacancies still remain well above their pre-pandemic levels.”
Chancellor of the Exchequer, Jeremy Hunt. responded: “It’s heartening to see inflation falling and real wages growing, keeping more money in people’s pockets.
“Building on the labour market reforms in Spring, the Autumn Statement will set out my plans to get people back into work and deliver growth for the UK.”
UK
Mohamed al Fayed ‘carried Viagra’ and ‘cherry picked’ women from Harrods shop floor, ex-employee claims
A former member of the Harrods management team has told how Mohamed al Fayed would “cherry pick” women from the shop floor.
Speaking to Sky News anonymously, the woman described the billionaire, who died last year aged 94, as “demonic” and said he “controlled everything with fear”.
Lawyers representing 37 alleged victims of sexual abuse at the hands of Fayed branded him a “monster” who was “enabled by a system that pervaded Harrods” at a news conference on Friday.
The former employee of the luxury department store, which the Egyptian businessman took control of in 1985, worked at Harrods at the height of his power.
“We were all told Harrods is the greatest place on Earth – but he controlled everything with fear,” she said.
“The power dynamic was so strong, in the blink of an eye you would lose your career and they would try and destroy you. It was this dark psychological trap and everybody was caught.”
She said she heard stories Fayed, known to staff as “the chairman”, would grope people although she was never a victim herself.
Harrods department store in London. Pic: AP
“The chairman would walk around the store and he would cherry pick people from the shop floor, if you had blond hair and brown eyes you were favoured,” she said.
“He used to say, ‘I want that one up in my office now’. He used to carry Viagra around in his pocket, and people were so scared of his ‘floor walks’ – if you weren’t smiling enough you were in the shit, if you smiled too much you were also in the shit.”
Read more: Egyptian tycoon was never far from controversy
The ex-employee, who worked at Harrods in her first job after leaving university, said when women were called to Fayed’s office they “couldn’t say no”.
“I would sit her down and I would say I need to let you know what you are walking into,” she said.
“It’s suddenly a pay rise, and you’ll be invited to expensive events and lavished with expensive gifts but really you need to be aware of something.
“I said you will get invited to Park Lane, and parties where there will be lots of rich men, and you would be invited to sleep with people.”
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She said she was once asked to see Fayed in his lounge-like office where he was wearing his slippers and said: “When are you going to come up and work for me here?”
The woman said she told him she did not want to work there and went back to her normal job.
“Afterwards he would smile at me and was courteous but then I started getting extra money in my pay packet. I went to the pay office and they said it’s a bonus for what you are doing. It didn’t last long but it happened just after he’d asked to meet him.”
The woman said she now feels “really conflicted” as she was “vulnerable too”.
“It was my first job leaving university. It leaves me feeling angry that we put up with things in that generation, that was our norm,” she added.
Harrods has said in a statement it is “utterly appalled” by the allegations of abuse and apologised to Fayed’s alleged victims.
The department store has also set up a page on its website inviting former employees to come forward if they have allegations.
A body has been found in the search for a missing hospital chaplain who starred in a Channel 4 documentary.
Katherine Watson, 50, was last seen in the Heaton Road area of Newcastle, at about 1pm on Thursday and Northumbria Police had become “increasingly concerned” for her welfare.
But after “extensive searches”, the force said a body had been found in the Jesmond Dene area of the city. Although formal identification has yet to take place, “it is believed to be Katherine”, they added.
“Her next of kin have been made aware and are being supported by specially-trained officers,” it said.
“This is an incredibly sad outcome and our thoughts are with Katherine’s loved ones at this difficult time. We will continue to support them in any way we can and we ask that their privacy is respected.”
Also known as Reverend Captain Katie Watson, she joined the army in her late teens, serving in Bosnia in the 1990s and as part of the Royal Military Police.
“Once you have seen genocide first-hand on the streets of a European country, there is nothing left in the world that can faze you after that,” she told the Church Times in 2022, as the Geordie Hospital documentary was first aired on Channel 4.
“I have seen the worst of humanity and I have seen, and continue to see, the very best of it.”
Ms Watson worked at the Newcastle-Upon-Tyne Hospitals NHS Foundation Trust for more than 16 years and was made head of chaplaincy in 2020.
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Channel 4’s documentary Geordie Hospital was a six-part series that filmed hospital staff through a shift, featuring a cast including porters, surgeons, dental nurses and chaplains.
Speaking about her role in the show, Ms Watson said: “We only have two things to offer, the gifts of time and presence, but we give them whole-heartedly.”
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There was an outpouring of support online for Ms Watson following the news she was missing.
“She baptised our baby boy when he passed away at birth and presided over his funeral,” one person wrote on X. “She’s such a wonderful person who gave us unwavering support through our darkest hours.”
Another said: “The compassion and care you gave me and my family when our mum passed last year was a tremendous blessing and support.”
Sir Keir Starmer will no longer accept donations in the future to pay for clothes, Sky News understands.
Rachel Reeves and Angela Rayner also announced they would take the same approach moving forward.
The decision by the prime minister, chancellor and deputy prime minister follows scrutiny of Sir Keir Starmer and his wife for accepting donations.
The prime minister has accepted work clothing donations worth £16,200, and multiple pairs of glasses, to the value of £2,485.
According to the MP register of interests, Ms Rayner has accepted clothing donations too, to the value of £2,230.
Sky News understands that in June, the deputy prime minister also received a donation by Lord Waheed Alli, a television executive who has donated to Labour over the last 20 years, of £3,550.
The donation was registered but its nature, now understood to be work clothing, was not published.
Sky News understands that since the backlash over the freebies, the registrar was contacted to ensure the donation was published with all the necessary details.
The chancellor has not accepted any such donations, according to the MPs’ register of interests.
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Nigel Farage has called out the PM for accepting free gifts
Sky News revealed the scale of Sir Keir’s donations this week as part of our Westminster Accounts investigation.
Sir Keir was found to have received substantially more gifts and freebies than any other MP as his total in gifts, benefits, and hospitality topped £100,000 since December 2019.
This had all been declared as per the rules but backbench MPs had been expressing concern that the government’s rhetoric of tough decisions on the economy jars with the image of a prime minister accepting freebies.
The row started over the weekend with controversy over Sir Keir’s wife’s clothes.
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Jess Phillips, minister for safeguarding and violence against women and girls, said earlier today she is “satisfied” with the prime minister’s explanation of why he has taken the freebies.
She said if he “wasn’t doing a good job in our country” then she “would be more concerned”.
Ms Phillips went on to say it’s not that she doesn’t think it’s important, but added: “I haven’t had a single email about it.
“I have had lots of emails about people not being able to get on a housing list.”
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People react to the prime minister receiving gifts and freebies
Challenged on the fact that it looks bad having just taken away the winter fuel allowance from pensioners, Ms Phillips said these are “completely separate things”.
“And had he never been to watch the Arsenal, there would still be a £22bn black hole that had to be paid for,” she added.
She said: “All I can say is I’m absolutely knackered trying to make things better.”
What has the PM said in response to criticism?
Speaking to journalists this week, the prime minister said “all MPs get gifts” and he thinks the need to declare them is “a good framework”.
“Wherever there are gifts from anyone, I’m going to comply with the rules,” he said.
“It’s very important to me that the rules are followed. I’ve always said that. I said that before the election. I reinforced it after the election.”
On his acceptance of Arsenal tickets, he added: “I’m a massive Arsenal fan. I can’t go into the stands because of security reasons. Therefore, if I don’t accept a gift of hospitality, I can’t go to a game. You could say: ‘Well, bad luck.’
“That’s why gifts have to be registered. But… never going to an Arsenal game again because I can’t accept hospitality is pushing it a bit far.”
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