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Retail prices

CPI jumps from 3.1% to 4.2%, RPI up from 4.9% to 6.0%

In October, the Retail Prices Index (RPI) stood at 312.0 (January 1987=100) and the annual rate of inflation increased from 4.9% in September to 6.0%.

Whilst RPI is no longer an official statistic, union negotiators consider it to be the best available measure of inflation.

The annual rate of inflation under the Consumer Prices Index (CPI) in October was 4.2% sharply up from 3.1% in September.

Under the Consumer Prices Index Housing (CPIH), the annual rate of inflation in October was 3.8% up from 2.9% in September.

Big increases in the price of electricity, gas, fuel, second hand cars all contributed to the sharp rise in inflation.

Figures for November 2021 are due to be published on 15 December 2021.


Latest pay deals

3.0% increase in the three months to October

The median standard increase for November 2020-October 2021 was 2.0% (1.0% in the public sector) - the median increase on the lowest pay rate was slightly higher at 2.15%. Three-quarters of these pay settlements were first stage/unstaged.
The median standard increase for the three months from August 2021-October 2021 was 3.0% - the median increase on the lowest pay rate was higher at 3.6%.

Figures for November 2021 are due to be published on 15 December 2021.

Pay deals are calculated from Payline database of over 2,000 pay and conditions settlements. graph of pay settlements and inflation

Average earnings

Growth still artificially high but tailing off

Average weekly earnings for regular pay (excluding bonuses) in August 2021 continued its two month dip to 5.0% from 5.9% the previous month (and higher for the 3 months before that).

The growth figures should be seen with continued caution as they are driven higher because of the fall in the proportion of low paid jobs due to the pandemic and because they are based on a comparison to a period last year when wages were still subject to the economic shock of the pandemic (this is called the base effect). Underlying growth is estimated to be likely under4.0%.

Growth has slowed across the board in the somewhat distorted figures but it is largely being driven by the private sector which is posting a 5.6% (down from 6.7%) single month comparison, and 6.8% for the three months to August.

In contrast, Public Sector wage growth is down considerably at 2.7%. Financial services is still very high but down at 7.8% whilst other sectors such as Manufacturing is down to 2.9% in the month (from over 6 three months ago) and construction has plunged back down to 5.9%, from a high of over 13 a couple of months ago.

The slight dip in the high growth figures may show the recovering economy in 2020 rather than indicate anything meaningful about the last months.
PAYE data provides Early estimates for September 2021 indicate that median monthly pay increased by 5.2% compared with September 2020 and increased by 7.5% when compared with February 2020.

Median pay across the regions of the UK in September 2021 ranged from £1,678 in Leicester to £3,092 in Wandsworth.

Figures for September/ October 2021 are due to be published on 16 November.

Unemployment

Increase in payroll jobs but still below pre-pandemic level

Early estimates for September 2021 indicate that the number of payrolled employees rose by 3.6% compared with September 2020, which is a rise of 1,008,000 employees; the number of payrolled employees is up by 0.4% since February 2020, a rise of 122,000. Payrolled employment has now exceeded its pre-pandemic level.

An estimated 1.51 million people were unemployed, down 40,000 from the previous quarter.

The UK unemployment rate was estimated at 4.5%, 0.5 percentage points higher than before the pandemic, but 0.4 percentage points lower than the previous quarter.

The ONS' claimant count total includes people out of work and claiming Jobseeker's Allowance or Universal Credit.

The Claimant Count, as at decreased very slightly at around 2,292,992 (seasonally-adjusted), down around 51,500 on the previous month.

Figures for September (unemployment) and October (claimant count) are due to be published on 16 November 2021.
 

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