Why UK wages aren't growing in line with jobs

Immigration, low-skilled work and the squeeze on public sector pay explain the ongoing weakness of wage growth

Employment is at levels not seen since modern records began in the early 1970s. Hundreds of thousands of jobs are being created every year and most of them are full time. The jobless rate is half the European average. According to the Bank of England, wage settlements should be getting more generous as employers compete for a shrinking pool of workers.

In fact, the opposite is happening. Despite a higher percentage of the population working than ever before, the annual rate of growth in earnings is falling not rising. Clearly, workers are not in such short supply as the Bank of England imagines.

Related: UK wage growth slows as employment rises