Employment is improving – so why aren’t our pay packets getting bigger?

The unemployment rate is forecast to come down to 6.5% for the three months to May, from 6.6% in the previous three months – bringing it to the lowest since 2008.

However, the Trades Union Congress has criticised these figures, saying employment in some regions is still far behind London.

“The talk in the City and around Westminster may be about a fast growing economy but the recovery still feels a good way off for millions of people still desperate for work across the rest of the country,” Said TUC general secretary Frances O’Grady.

This comes as weak wage growth of 0.5% was recorded between March and May, while inflation was at 1.5%, leaving workers worse off in real terms.

The Office for National Statistics has previously blamed poor wages on lack of productivity. Productivity has been much slower to pick up during this recession than in previous economic downturns.

Economists’ views on whether poor productivity is a long-term or short-term problem are divided.

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