Unemployment up, real wages way down

The squeeze is still very much in effect.

The unemployment rate has risen by 0.2 per cent quarter-on-quarter, to 7.9 per cent, leaving 2.56m unemployed people in the country. That's a small increase, against a background of continued slow improvement in unemployment, but it's unfortunate nonetheless.

The uncanny strength of the labour market was the one shining light in the otherwise continuous stretch of bad economic news the chancellor has had to announce. If this is a turnaround – or even if the steadily improving jobs figures have now started to stagnate – he would be fully in the shit. Youth unemployment is also up quarter on quarter, rising 0.6 percentage points to 21.1 per cent. There are now 979,000 unemployed 16 to 24-year-olds.

The good news here (and you can rely on the DWP to highlight it) is that much of the rise in unemployment comes from a drop in the inactivity rate – the number of working-age people not in employment. That's down to 22.2 per cent, the lowest in over 20 years. The reasons behind such a drop are always murky, but they're likely to represent a mixture of people being forced back into work through the government's welfare changes and people making the decision to go back to work due to a strengthening labour market.

But that good news is buried by the growth in pay, which, at 1 per cent year-on-year, is the lowest since records began in 2001. Compared to CPI – holding steady at 2.8 per cent – that means that real wages are getting hammered. They've been steadily declining since Autumn 2009, and are now shrinking faster than they have been in a year. The squeeze is still very much in effect.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Lord Sainsbury pulls funding from Progress and other political causes

The longstanding Labour donor will no longer fund party political causes. 

Centrist Labour MPs face a funding gap for their ideas after the longstanding Labour donor Lord Sainsbury announced he will stop financing party political causes.

Sainsbury, who served as a New Labour minister and also donated to the Liberal Democrats, is instead concentrating on charitable causes. 

Lord Sainsbury funded the centrist organisation Progress, dubbed the “original Blairite pressure group”, which was founded in mid Nineties and provided the intellectual underpinnings of New Labour.

The former supermarket boss is understood to still fund Policy Network, an international thinktank headed by New Labour veteran Peter Mandelson.

He has also funded the Remain campaign group Britain Stronger in Europe. The latter reinvented itself as Open Britain after the Leave vote, and has campaigned for a softer Brexit. Its supporters include former Lib Dem leader Nick Clegg and Labour's Chuka Umunna, and it now relies on grassroots funding.

Sainsbury said he wished to “hand the baton on to a new generation of donors” who supported progressive politics. 

Progress director Richard Angell said: “Progress is extremely grateful to Lord Sainsbury for the funding he has provided for over two decades. We always knew it would not last forever.”

The organisation has raised a third of its funding target from other donors, but is now appealing for financial support from Labour supporters. Its aims include “stopping a hard-left take over” of the Labour party and “renewing the ideas of the centre-left”. 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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