UK workers face "year of slim pickings" British workers face a "year of slim pickings" despite falling unemployment and a likely end to the five-year squeeze on real earnings, a prominent labour economist has forecast. John Philpott, director of the Job Economist consultancy, said an overall improvement in the UK labour market would do little to improve the "economic feelgood factor" for most employees. Pressure on employers to pay their most valued staff more to stop them from leaving could give rise to workplace disharmony. Mr Philpott predicted that unemployment - currently 2.39m, or 7.4 per cent of the workforce - would fall to 2.3m or 7 per cent by midyear, but then stabilise, as faster growth in labour productivity curbed the pace of job creation. The 7 per cent figure has added significance since the Bank of England adopted forward guidance in August, saying it would not consider raising interest rates from 0.5 per cent until unemployment fell to 7 per cent. The BoE has said this could happen as soon as the end of 2014, but recently emphasised it will not raise rates until Britain has had a prolonged period of strong growth, resulting in higher real incomes. Mr Philpott has forecast that average weekly earnings will rise by 2.4 per cent next year. With consumer price inflation predicted to be down to 2.2 per cent by the end of the year, that would see the end of the post-recession squeeze on real earnings. However, he said the increase in real pay would be too small to have a perceptible impact on the financial wellbeing of most employees. "This time last year we correctly forecast that 2013 would be a year of "hard slog" for UK workers, with longer hours for no extra real reward. For the majority of workers, 2014 is unlikely to feel much better - the pickings improved but still very slim," said Mr Philpott. He said higher job vacancies and falling unemployment would lead to more employees seeking to switch jobs in the hope of improved pay and conditions. Despite the lack of serious overall wage inflation, this would put pressure on employers to respond by increasing some workers" pay in an effort to recruit and retain individuals in greatest demand. The impact on pay inequality at a time of meagre growth in average real pay could result in feelings of unfairness in many workplaces. "A faster-growing economy with more jobs, increased vacancies and lower unemployment should enable individuals with sought-after skills or abilities to command pay rises well above the average," he said. For the first time since the start of the recession, employers will find it hard to both compete for talent and keep the majority of workers content with their lot He said employers would have to balance the need to pay above the odds for some workers against the frustrated pay aspirations of their workforces as a whole. The rationale for individual pay awards would have to be as transparent as possible in order to avoid any sense of cronyism, he said. "In particular, employers will need to ensure that simplistic reference to the importance of "top talent" is not used as justification for increased executive reward in the absence of clear evidence of exceptionally high performance." He forecast that private sector employment would grow by 450,000, more than offsetting a fall in public sector employment of 130,000. The number of unemployed 16 to 24-year-olds would fall below 900,000 and the long-term unemployed would fall to 820,000, he said. Some economists are already predicting that unemployment may fall below 7 per cent by next spring. The one-month figure for October - although a smaller sample than the recent quarterly jobs data - was already down to that level.