UK Edition
A boom in hiring across the NHS and civil service has pushed public sector employment to its highest level in more than a decade.
A total of 5.9m people now work for the state, according to the Office for National Statistics, a jump of 133,000 over the past year.
The NHS has been the biggest recipient of extra staff, with headcount up by 78,000 since 2022 and 21,000 in the three months to June alone.
Since the coalition government came to power in 2010, the NHS workforce has ballooned to almost 2m employees, up from almost 1.6m 13 years ago.
Over the past year, the civil service has grown by 10,000 staff, which is part of a broader 33,000 increase in roles across public administration.
An extra 9,000 public sector staff have been employed in education, while a further 8,000 have been hired by police.
The armed forces shrank by another 3,000, taking headcount down from 197,000 when the Conservatives came to power alongside the Liberal Democrats, to 153,000 now.
Increased public sector employment has coincided with rising levels of pay.
In the three months to July, public sector pay was up 12.2pc compared to the same period last year, far and away the largest jump on records that date back more than 20 years.
This was largely driven by bonuses, but increased salaries for workers, including those in the NHS, pushed up regular pay by 6.6pc over the period.
At the same time, pay in the private sector was up by 7.6pc, down slightly from the 7.8pc recorded in the three months to June.
Overall, pay across the economy was up by 8.5pc, the highest on record aside from the furlough scheme during the pandemic.
The ONS’s single-month figures show pay growth slowed from 9.3pc in June to 8.1pc in July.
It marks the second month in a row of average earnings rising faster than inflation, as price rises slowed from 7.9pc to 6.8pc over the same period, meaning the cost of living crisis is at last easing.
Higher pay could put pressure on the Bank of England to raise interest rates again next week, as policymakers fear more money across households will lead to greater spending and potentially keep inflation above the UK’s 2pc target.
Ashley Webb at Capital Economics said: “The further rise in wage growth will only add to the Bank of England’s unease and supports our view that the Bank will raise interest rates once more, from 5.25pc currently to a peak of 5.5pc, next week.”
Tuesday’s data also revealed that the number of people unemployed rose by 159,000 to 1.5m, the biggest three-month rise since the lockdowns of late 2020, taking the unemployment rate to 4.3pc – its highest in almost two years.
Employment fell by almost 200,000 to 32.9m, driven by a fall in men in work. Future employment growth is also at risk as the number of job vacancies dropped below 1m for the first time in two years, indicating waning demand from bosses.
The number of working-aged people who are inactive – neither in work nor looking for work – rose by 63,000, taking the inactivity rate to 21.1pc.
The number who are long-term sick rose by more than 49,000 to a new record high of 2.6m, while the number of inactive workers who said they would like a job – even if they are not actively searching for one and so not classed as unemployed – fell by more than 93,000 to 1.7m.
Tony Wilson, director at the Institute for Employment Studies, said: “This points to two big challenges for government: too many people are outside the labour force entirely, but those that are looking for work are finding it harder to get it.
“So we need action on both fronts, to help people to start looking for work but also to get much better at helping people find it.
Chancellor Jeremy Hunt said: “It’s heartening to see the number of employees on payroll is still close to record highs and that our unemployment rate remains below many of our international peers.
“Wage growth remains high, partly reflecting one-off payments to public sector workers, but for real wages to grow sustainably we must stick to our plan to halve inflation.”