1 in 4 jobless

Scottish employment and wage growth down and trailing behind rest of UK... with worse to come

‘Calm before the inflation storm’

MORE than a quarter of working age Scots do not have jobs as unemployment soars.

The rate of employment, wage growth and number of potential workers all trail the rest of the UK.

The proportion of employed Scots has fallen below 75 per cent, while the unemployment rate is now higher than any of the other devolved nations.

Figures also show a significant drop in the proportion of unemployed women, while the reverse is true for men, with fewer employed and more seeking work.

Experts warned that worse was still to come. With inflation jumping to 6.3 per cent in February, and set to surpass 8 per cent this month, wages are falling in real terms.

When the rising cost of living is factored in, pay growth of 4 per cent in December to February tipped into a real-terms slump of 1 per cent.

And the Bank of England has predicted inflation could climb into double figures before the end of 2022.

All of this means the average household is likely to find itself £900 worse off this year, according to forecasts from accountancy firm PwC – and the lowest earners could see their incomes plunge by as much as £1,300.

Jake Finney, an economist at PwC, said: ‘Lower-income workers are expected to see the sharpest fall in their wages this year, as higher earners are seeing significantly larger rises in their nominal pay packets.

The worst is yet to come for workers. The pay squeeze is likely to tighten, with real wages expected to fall by around 2 per cent this year.’

In Scotland, total employment fell by 0.3 percentage points to 74.7 per cent in the last quarter and remains below the 75.3 per cent recorded before the pandemic.

The unemployment rate – those not in work but seeking jobs or waiting to start – has dropped from 4.6 per cent in December to February 2020 to 3.5 per cent this past quarter.

But Wales saw its rate fall from 4.9 per cent to 3 per cent. Northern Ireland’s unemployment rate is only 2.5 per cent.

Laith Khalaf, head of investment analysis at AJ Bell, said: ‘What we are seeing in the labour market is the calm before the inflationary storm.

This month, price rises are going to move up a notch and really exert pressure on consumer purses.’

Secretary of State for Scotland Alister Jack said: ‘More people are in paid employment than before the pandemic.’

Public finance minister Tom Arthur said: ‘The Scottish Government remains committed to doing all we can to help our economy recover.’