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UK unemployment falls to 11-year low UK unemployment falls to 11-year low
(about 3 hours later)
Unemployment dropped to its lowest level in 11 years in September in a further indication that Britain’s employers have largely shrugged off the June Brexit vote.Unemployment dropped to its lowest level in 11 years in September in a further indication that Britain’s employers have largely shrugged off the June Brexit vote.
In the first health check of the labour market covering the three months since the referendum, official figures show the unemployment rate was 4.8%, the lowest since September 2005 and down from 4.9% in August and 5.3% a year earlier. Official figures show the unemployment rate was 4.8%, the lowest since September 2005 and down from 4.9% in August and 5.3% a year earlier.
Employment remained at a record high of 74.5% and annual wages rises, excluding bonuses, also nudged higher to 2.4% from 2.3% in August and 2.1% in July, according to the Office for National Statistics. The fall in unemployment by 37,000 from the previous quarter to 1.6m was held up by employment minister Damien Hinds as the mark of a strong labour market in the wake of the referendum vote.
But the claimant count in October jumped by its highest number since May, and analysts warned that the rate at which employers were taking on new workers had slowed dramatically. He also welcomed the employment rate, which remained at a record high of 74.5% and figures showing that annual wage rises, excluding bonuses, nudged higher to 2.4% from 2.3% in August and 2.1% in July.
Employment growth slowed to 49,000 in the three months to September from 106,000 in August and a 173,000 rise in the three months to July. “Growth is being fuelled by full-time professional jobs while wages are continuing to perform strongly, which underlines the resilience of the UK labour market,” he said.
Most forecasters also expect inflation to rise in the coming months, overtaking wage rises and threatening the living standards of most workers. But figures from the Office for National Statistics revealed the claimant count in October jumped by its highest number since May, and analysts warned that the rate at which employers were taking on new workers had slowed dramatically.
Employment growth slowed to 49,000 in the three months to September from 106,000 in August and a 173,000 rise in the three months to July, while the claimant count jumped almost 10,000 to 803,300.
The figures for the three months to September are the first health check of the labour market where all the data was gathered following the referendum vote.
The Bank of England, the International Monetary Fund and the Paris-based think tank, the OECD, had all predicted that a vote to leave the European Union would take its toll on employers and push up unemployment.
Most forecasters now expect GDP growth to slow and inflation to rise in the coming months, overtaking wage rises and threatening the living standards of most workers during 2017.
Alan Clarke, an economist at Scotia Bank, said: “Our only hope is that wage inflation will rise in tandem with inflation. However, I suspect that given the leads and lags, wages will not rise quickly enough to offset the squeeze to real incomes in 2017.”Alan Clarke, an economist at Scotia Bank, said: “Our only hope is that wage inflation will rise in tandem with inflation. However, I suspect that given the leads and lags, wages will not rise quickly enough to offset the squeeze to real incomes in 2017.”
John Philpott, the director of The Jobs Economist said that while the post Brexit period have proved calmer than many had previously thought, the prospect of leaving the EU was unlikely to aid productivity growth, which remains stuck at 0.4%.
“When higher price inflation is also in the pipeline, even a strong labour market may struggle to deliver sustained real wage improvements for most UK workers.”
The Federation of Small Businesses said the continuing rise in self employment was another indication of the increasingly fragile state of the labour market.
The number of self-employed people has increased by 213,000 since the same time last year to reach 15.1% of those in work.
Mike Cherry, the FSB’s national chairman, said: “The UK has so far failed to keep pace with the rapid rise of self-employment. These figures are another signal that more needs to be done to support the self-employed, including on developing a clear legal definition of self-employment and on issues like access to mortgages and income protection, and addressing the discrepancies between the self-employed and employees in the social security system, such as on maternity pay.”
Independent think tank Fathom Consulting said the uncertainty generated by the Brexit vote “will go on for months, if not years”, hitting business investment first, and resulting in greater job losses.
ONS statistician David Freeman said the slowdown in employment growth showed the labour market “might be cooling”.ONS statistician David Freeman said the slowdown in employment growth showed the labour market “might be cooling”.
He added that the limited information on the flow of foreign workers “suggests the referendum outcome and subsequent devaluation of sterling has had little impact so far on the number of EU workers in the UK labour force”.He added that the limited information on the flow of foreign workers “suggests the referendum outcome and subsequent devaluation of sterling has had little impact so far on the number of EU workers in the UK labour force”.
The employment minister, Damian Hinds, said: “Yet again we have a strong set of figures, with employment continuing to run at a record high and unemployment falling to a 11-year low.
“Growth is being fuelled by full-time professional jobs while wages are continuing to perform strongly, which underlines the resilience of the UK labour market.”