Rishi Sunak today branded inflation ‘the enemy’ and vowed to ‘fix’ Liz Truss’s ‘mistakes’ as figures revealed pay tumbling in real terms.
The PM acknowledged people were suffering from the cost-of-living squeeze after official figures showed total wages – including bonuses – down 3.7 per cent in the three months to September compared to the same period last year.
That was the biggest fall since the aftermath of the credit crunch in 2009, while regular pay was down by 3.8 per cent taking account of the headline CPI inflation rate.
Excluding the impact of price rises the figures were 6 per cent for total pay and and 5.7 per cent for regular pay – some of the highest levels seen outside of the Covid period.
Compared to the three months to August unemployment was up 0.1 percent points, and there was also a rise in the single month of September to 3.9 per cent – although those figures are more volatile.
Unemployment dipped by 0.2 percentage points to 3.6 per cent from the previous quarter. But that was driven by an increase in people who were economically inactive, with long-term sickness rising to a record high in the wake of the pandemic.
Official figures showed that taking CPI inflation into account total wages – including bonuses – were down 3.7 per cent in the three months to September compared to the same time last year
Rishi Sunak (pictured at the G20 summit in Bali today) branded inflation ‘the enemy’ and vowed to ‘fix’ Liz Truss’s ‘mistakes’ as figures revealed pay tumbling in real terms
The ONS said employment was unchanged in the quarter, while unemployment was down as economic inactivity rose
Work and Pensions Secretary Mel Stride admitted the government needs to ‘address’ rising economic inactivity
More than 500,000 working days lost to strikes over summer
More than half a million working days were lost to strikes over the summer as unions demanded huge pay rises.
Official figures showed that industrial action – including by rail and Royal Mail workers and barristers – cost 356,000 days in August, with 148,000 staff involved.
Another 205,000 were missed in September with 97,000 workers taking part. Most of the disputes were over wages, as inflation deals a hammer blow to living standards.
The level was the highest over two months for more than a decade, and there are fears the situation will get worse as the cost of living crisis bites and the government tries to hold down public sector pay increases.
Some 997,000 days were lost in November 2011 when a million people went on strike over Coalition austerity measures.
During a round of broadcast interviews at the G20 summit in Bali, Mr Sunak said inflation was the factor that is ‘making people poorers’.
He told ITV: ‘I think what today’s figures show is that the enemy we have to face down is inflation.
‘That’s what’s making people poorer, that’s what’s driving up the cost of living and everyone’s bills that they’re opening every week, every month.
‘I want to make sure that we get a grip of inflation, reduce it, and that’s why the Chancellor’s statement is so important, because it will put our public finances on a sustainable trajectory which will help us grip inflation, it will help us limit the increase in mortgage rates.
‘And that’s why we need to do what we’re going to do.’
Mr Sunak repeatedly refused to apologise for the Tories’ handling of the economy.
Pressed by Sky News, Mr Sunak said he had acknowledged ‘mistakes were made’.
‘What I want to do now is fix them,’ he said.
‘I think I demonstrated over the summer that I’m prepared to be honest with the country about the challenges we face and to make the difficult decisions that are required to fix them.’
Responding to the ONS figures, Chancellor Jeremy Hunt said: ‘I appreciate that people’s hard-earned money isn’t going as far as it should.
‘Putin’s illegal war has driven up inflation – a hidden and insidious tax that is eating into paychecks and savings.
‘Tackling inflation is my absolute priority and that guides the difficult decisions on tax and spending we will make on Thursday.
‘Restoring stability and getting debt falling is our only option to reduce inflation and limit interest rate rises.’
Darren Morgan, director of labour and economic statistics at the Office for National Statistics (ONS), said: ‘The proportion of people neither working nor looking for work has risen again.
‘Since the onset of the pandemic, this shift has largely been caused by older workers leaving the labour market altogether, but in the most recent quarter the main contribution has actually come from younger groups.
‘August and September saw well over half a million working days lost to strikes, the highest two-month total in more than a decade, with the vast majority coming from the transport and communications sectors.
‘With real earnings continuing to fall, it’s not surprising that employers we survey are telling us most disputes are about pay.’
He added: ‘Job vacancies continue to fall back from their recent peak, with increasing numbers of employers now telling us that economic pressures are a factor in their decision to hold back on recruitment.
Chancellor Jeremy Hunt branded inflation a ‘hidden and insidious tax’ and said the grim picture underlined the need to take ‘difficult decisions’ in the Autumn Statement on Thursday
People aged 16-24 drove the latest increase in the economic inactivity rate
Long-term sickness has been the biggest driver in the rise in economic inactivity since Covid
Company insolvencies leap by 38%
Company insolvencies leapt by 38 per cent last month in England and Wales as the economic downturn caused more firms to collapse.
Fresh figures from the Insolvency Service showed that 1,948 companies tumbled into insolvency in October, compared with 1,410 over the same month last year.
It also represented a significant lift on the 1,684 insolvencies recorded in September 2022.
The latest jump in insolvencies has been partly driven by a rise in compulsory liquidations.
‘The biggest driver behind the fall came from hospitality, followed by retailing and wholesaling.’
Shadow chancellor Rachel Reeves said: ‘Real wages have fallen again, thousands of over 50s have left the labour market and a record number of people are out of work because they’re stuck on NHS waiting lists or they’re not getting proper employment support.
‘What Britain needs in the Autumn Statement on Thursday are fairer choices for working people, and a proper plan for growth.’
Work and Pensions Secretary Mel Stride said: ‘It is encouraging that unemployment remains low and there are a record number of people on payrolls.
‘We know we need to address the increasing numbers in economic inactivity, which is why it is one of my top priorities.
‘Our mission is to help people improve their lives through work and to support the most vulnerable, ensuring those looking for work and those already in work have the opportunities and skills they need to succeed.
‘That will continue to be my focus as we confront the challenges we’re facing this winter, directly supporting those most in need, while restoring economic stability and confidence.’