Jake Finney, economist at PwC UK, said:
"The unemployment rate fell to 3.7% in the three months to March, reaching its lowest level since the mid-1970s. As a result, there are now more vacancies than there are people seeking work for the first time since records began. This fall in unemployment was accompanied by a record high movement of people from economic inactivity into employment. However, there are still around 0.8m additional people who were neither working nor seeking employment compared to the start of 2021.
"The real wage squeeze continued to tighten as the highest earners were the only group to see their pay packets grow by more than inflation, while the lowest earners saw the sharpest fall in their real wages. As a result, our modelling suggests that lower-income households could see their incomes fall by as much as £1,300 this year.
"We expect that unemployment could start to rise towards the end of the year as headwinds from the war in Ukraine reduce the demand for labour. The delayed impact is because the labour market tends to lag behind the rest of the economy."
Annual nominal pay growth, three months to March 2022
Source: ONS, PwC analysis
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