The number of UK workers on payrolls rose by 31,000 between May and June to 29.6 million, the Office for National Statistics said.
ONS head of labour market and household statistics David Freeman said: “Today’s figures continue to suggest a mixed picture for the labour market.
“The number of people in employment remains below pre-pandemic levels and, while the number of people neither working nor looking for a job is now falling, it remains well up on where it was before Covid-19 struck.
“With demand for labour clearly still very high, unemployment fell again, employment rose and there was another record low for redundancies.
“Following recent increases in inflation, pay is now clearly falling in real terms both including and excluding bonuses.
“Excluding bonuses, real pay is now dropping faster than at any time since records began in 2001.”
Ben Harrison, Director of the Work Foundation at Lancaster University, a leading think tank for improving work in the UK, said: “Workers across the UK are facing shrinking pay packets as inflation bites. Today’s figures show real wages (excluding bonuses) are down by a record 2.8% on the year, as inflation wipes out regular pay increases of 4.3%. With the Bank of England forecasting inflation will rise to 11% by the end of the year and energy prices set to soar, things are likely to get worse before they get better.
“The harsh reality is it will be acutely worse for the six million people in the UK who are in severely insecure work, and already face low pay and uncertain hours.
“Yet we haven’t heard anything from the Conservative leadership candidates that suggests they really recognise just how tough the squeeze is going to be for millions of workers.
“The next Prime Minister must bring forward a clear plan for how they will support the most in need as the cost of living surges, and strengthen employment rights to ensure all workers are protected by decent terms and conditions.”
