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Higher pay and employment suggests confidence is returning

There are more people in work in the UK than ever before, according to the latest labour market update from the CBI.

Employment went up by 165,000 on the previous quarter, bringing the total number of people in work up to 30.8 million, the highest number since records began.

The rise was driven by an increase in full-time employees, which offset declines for those working part-time or for themselves.

The report cited official statistics that showed real pay had fallen by 1.6 per cent, with inflation taken into account, with variations across the regions.

However, the CBI said the figures had been 'dragged down' by a recovery in low-paid jobs, which were hard hit during the recession.

Stripping this 'compositional effect' out, the report said that for people who had been in work continuously one year to the next, pay had increased by 4.1 per cent, much higher than inflation.


Growing confidence, rising pay

Martin Weale of the Bank of England's interest-rate setting committee, recently said that employers were becoming more confident and were more likely to offer larger pay rises this year.

The CBI itself said that more than half of UK firms plan to expand their workforce next year, with more permanent than temporary jobs being created.

But Acas Chair Sir Brendan Barber said, 'With the economy now beginning to show distinct signs of recovery, although unevenly across the country, workers are expecting this good news to be reflected in their pay packets.

'This is certainly happening in some parts of the private sector but pay has not risen in the same way within the public sector, which is inevitably leading to employment relations tensions.'

Pay growth was stronger in the private sector at 2 per cent than in the public sector at 0.9 per cent, the CBI said.


Acas publications and services

Acas experts can visit your organisation and help you find practical solutions to issues associated with Pay and reward: how Acas can help, and Recruitment and Retention: how Acas can help.

Acas training on Recruitment will guide you through all stages of the employment relationship, from selection and interviewing, to induction and contracts.

Courses on Negotiating skills, Managing change, Skills for supervisors will assist you approach issues to do with pay and employment relations, and help you get the best out of your people.

For free, impartial advice on any employment relations issue, call the Acas Helpline on 0300 123 1100, or consult Helpline Online.

Visit the Acas Training Courses, Workshops and Projects area for more information.

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