Finance Matters

Posts Tagged ‘ONS’

A combination of high inflation and low earnings growth has caused the incomes of UK households to fall by 3.5 per cent in real terms according to the latest figures from the Office for National Statistics (ONS).

The annual households earning survey found that the median salary for a full-time worker in the UK increased by 1.4 per cent in 2011, but taking into account CPI inflation of at least 5 per cent, this represents a 3.5 per cent fall in average pay and earnings.

Overall earnings growth was just 0.5 per cent compared with 2010, when part-time worker was taken into account.

The number of full-time workers fell by 380,000 in 2011, while the numbers of part-time employees grew by 72,000.

The figures highlight a growing pay gap between those on high salaries such as professionals, directors and senior managers, and those in occupations such as labourer, farm worker and postal worker.

While workers in these low-paid occupations suffered a 0.9 per cent drop in pay compared with 2010, professional pay increased by 1 per cent.

The median earnings of top directors and chief executives increased by 15% to £112,157, partly due to a move away from awarding bonuses and a subsequent increase in standard pay.

Waiters and waitresses suffered the biggest drop in pay, with an 11.2% decline compared with 2010.

The latest figures from Incomes Data Services (IDS) also show that UK workers are making a loss in real terms.

In October, when the national minimum wage increased to £6.08, wage rises fell to 2.3 per cent, compared with 2.4 per cent in September, according to IDS.

This reflects lower awards in leisure, retail, fast food and other private services firms, while the majority of public sector workers have had their pay frozen under the government’s austerity measures.

A combination of high inflation and low earnings growth has caused the incomes of UK households to fall by 3.5 per cent in real terms according to the latest figures from the Office for National Statistics (ONS).

The annual households earning survey found that the median salary for a full-time worker in the UK increased by 1.4 per cent in 2011, but taking into account CPI inflation of at least 5 per cent, this represents a 3.5 per cent fall in average pay and earnings.

Overall earnings growth was just 0.5 per cent compared with 2010, when part-time worker was taken into account.

The number of full-time workers fell by 380,000 in 2011, while the numbers of part-time employees grew by 72,000.

The figures highlight a growing pay gap between those on high salaries such as professionals, directors and senior managers, and those in occupations such as labourer, farm worker and postal worker.

While workers in these low-paid occupations suffered a 0.9 per cent drop in pay compared with 2010, professional pay increased by 1 per cent.

The median earnings of top directors and chief executives increased by 15% to £112,157, partly due to a move away from awarding bonuses and a subsequent increase in standard pay.

Waiters and waitresses suffered the biggest drop in pay, with an 11.2% decline compared with 2010.

The latest figures from Incomes Data Services (IDS) also show that UK workers are making a loss in real terms.

In October, when the national minimum wage increased to £6.08, wage rises fell to 2.3 per cent, compared with 2.4 per cent in September, according to IDS.

This reflects lower awards in leisure, retail, fast food and other private services firms, while the majority of public sector workers have had their pay frozen under the government’s austerity measures.

The Office for National Statistics (ONS) has today revealed the UK economy expanded by a better-than-expected 0.5% in the July to September period.

This compares with a 0.1% growth rate for the second quarter and was better than the 0.3% expected by most economists.

The better performance was attributed to production sector output, which rose 0.5% in the three month period, versus a 1.2% decline in the previous quarter.

Meanwhile, business services and finance were the biggest contributor to overall growth in the period, expanding by 0.8%, the Office for National Statistics said.

However, the better than expected figures should not be regarded as an economic rebound since it compares with a second quarter which was hit by “special factors” such as the Royal Wedding and Japanese tsunami which trimmed as much as 0.5 percentage points from quarterly growth, analysts’ said.

Analysts also point out that the third quarter growth was still weak, at just 0.5%, and the outlook remains bleak.

Meanwhile, Chancellor of the Exchequer George Osborne described the figures as “a positive step” but added that the British economy still has a “difficult journey”.

In other news today, the Markit Purchasing Managers’ Index (PMI) revealed manufacturing activity contracted in October with the index falling to 47.4 in October from a reading of 50.8 the previous month.

The index is at the lowest level since June 2009 and suggests a weak start to the final quarter of 2011.

As a result, the latest PMI figures suggest the economy is still struggling and the Chancellor admitted that the euro zone debt crisis remains a concern.

Chris Williamson, chief economist at Markit, said there is a “significant risk” of the economy contracting in the fourth quarter and this follows similar observations made last week by Martin Weale and Paul Fisher, who are both members of the Bank of England’s Monetary Policy Committee.

According to a report by the Office for National Statistics (ONS), the number of people paying into an occupational pension has slumped to a level not seen since 1956.

Last year, there were 8.3 million people contributing to an occupational pension (3 million in the private sector and 5.3 million in the public sector).

This represented the lowest figure for 54 years when 8 million contributed to this type of scheme – down from a record high of just over 12 million in 1967.

According to the National Association of Pension Funds (NAPF), in the last decade, thousands of private sector final salary schemes have closed to new members, with less than one in five final salary schemes now open to both new and existing members.

Commenting on the report, Joanne Segars, NAPF Chief Executive, said: “It’s astonishing that pension uptake has slumped to such a low level, and with a greying population living longer and longer, it’s the last thing our society needs.

“Unemployment is partly to blame, but many who have a job are struggling with household finances and the rising cost of living. People are thinking about today and putting tomorrow on hold, and unfortunately saving into a pension is being seen as a luxury,” she added.

She explains that many are being put off by the turmoil in the stock markets, as well as falling confidence in the pensions industry’s fees and charges.

However, Ms Segars warns that those who opt to stop paying into their pensions could be in for cash problems for later in life.

The Association is urging the Government do all it can with regard to new pension reforms by explaining the benefits of a pension and at the same time boosting confidence within the system.

The Office for National Statistics (ONS) has today revealed UK public sector net borrowing fell last month.

According to the ONS, public sector net borrowing came in at a lower than expected £14.1 billion in September, boosted by tax receipts.

Analysts had expected borrowing to total £14.5 billion.

Furthermore, the ONS revised down the borrowing figure for August by £2 billion to £13.7 billion.

The Government’s independent Office for Budget Responsibility (OBR) is expecting public sector net borrowing to come in at £122 billion for the current tax year – lower than the £143 billion borrowed in the previous tax year.

The latest figures means the Government is on track to meet its deficit target.

So far this year, the Government has borrowed £63.5 billion – down £7.5 billion on the same period a year earlier.

Overall, public sector net debt stands at 62.6% of UK GDP (total economic output) – up from 55.3% this time last year.

However, analysts have cautioned that the debt crisis in the euro zone, together with the Government spending cuts and rising unemployment, may hit the economy and make it harder to sustain borrowing reductions.

In other news this week, the ONS revealed Consumer Price Inflation (CPI) accelerated to annual rate of 5.2% last month from August’s rate of 4.5%.

The rate represented the highest since September 2008 and it has never exceeded this rate since the CPI measure was first calculated in 1997.

Furthermore, last week, the ONS revealed UK unemployment rose sharply in the three months to August – rising to a 17-year high.

The ONS said unemployment rose by 114,000 in the three month period to 2.57 million, taking the unemployment rate to 8.1% – higher than forecasts.

Rising inflation and unemployment are putting further pressure on households’ budgets and this is likely to impact on spending, which could weaken economic growth further.

The sluggish economy and rising unemployment could hit taxation revenues and lower the Government’s chances of hitting its target, according to analysts.