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Retail prices

RPI is slightly up at 1.1% and CPI is also slightly up at 0.5%

The largest contribution to the upwards move in the inflation rate in September came from recreation and culture.

A rise in transport costs, and restaurant and cafe prices, following the end of the Eat Out to Help Out scheme, was partially offset by smaller downward contributions from furniture, household equipment and maintenance; games, toys and hobbies; and food and non-alcoholic beverages.

In September, the Retail Prices Index (RPI) stood at 294.3 (January 1987=100) and the annual rate of inflation has risen to 1.1% from 0.5% in August. This is the measure preferred by trade unionists.

Under the Consumer Prices Index Housing (CPIH), the annual rate of inflation in September was also up to 0.7% from 0.5% in August.

The annual rate of inflation under the Consumer Prices Index (CPI) in September was up slightly to 0.5% from 0.2%.

Figures for October 2020 are due to be published on 18 November 2020.

Latest pay deals

2.3% pay increase in the three months to September 2020

The median increase in pay in the three months to september 2020 was 2.0%. The median increase in the lowest pay rate was 2.3%.

However these figures are based on a small number of pay settlements.

Figures for October 2020 are due to be published on 18 November 2020.

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

Average earnings

Growth strengthened somewhat in August after previous drop

In August 2020, average weekly earnings for the whole economy, excluding bonuses, grew by 1.7%, up from 0.9% in July.

Growth in the July headline rate (the latest three-month average) for regular pay, excluding bonuses, was 0.8% against 0.2% for July, according to the Office for National Statistics.

Pay growth strengthened in August 2020 following strong falls between April and June; as furloughed employees have continued to return to work.

There are still falls in pay in some sectors, however. Headline average earnings growth in manufacturing stayed negative at 0.9% from -1.7% last month, while wholesaling, retailing, hotels & restaurants was also negative -1.8% from -3.1%.

In the private sector as a whole, the headline rate was flat at 0.0% but this is an improvement on -0.8% last month, whilst single month figures showed 1.2% growth.

The public sector, excluding financial services, showed a different picture with the headline rate of growth decreasing slightly to 4.1% from 4.4%.

Figures for September 2020 are due to be published on 10 November 2020.

Unemployment

Unemployment at 4.5%, August claimant count continues rise to 2.7m

Using HMRC Pay as You Earn data , early estimates for September 2020 indicate that there were 28.3 million payrolled employees, a fall of 2.2% compared with the same period in the previous year and a decline of 629,000 people over the 12-month period.

For June to August 2020, the unemployment rate for all people increased by 0.6 percentage points on the year, and increased by 0.4 percentage points on the quarter, to 4.5%

During this period, an estimated 1.52 million people were unemployed, up 209,000 on the year and up 138,000 on the quarter. The annual increase was the largest since 2011 and the quarterly increase was the largest since the last recession in 2009.

Official statistics are now also beginning to show a fall in the estimated employment rate for all people. This was 75.6%; this is 0.3 percentage points down on the year, and 0.3 percentage points down compared with the previous quarter.

However, this still may not fully capture all the changes experienced in the labour market in recent months.
The ONS' claimant count total includes people out of work and claiming Jobseeker's Allowance or Universal Credit.

The Claimant Count increased in September 2020 to 2.7 million. This represents a monthly increase of 1.0% and an increase of 120.3%, or 1.5 million, since March 2020. The claimant rate rose to 7.6% from 7.5% the month before.

Figures for September (unemployment) and October (claimant count) are due to be published on 10 November 2020.
 

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