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UK unemployment rate stays at 4.8% as pay growth picks up UK employment falls in wake of Brexit vote
(about 1 hour later)
Britain’s unemployment rate was unchanged at 4.8% in the three months to October, while pay growth picked up to 2.5%. Employment in Britain has fallen for the first time in a year in a half in a sign that the UK jobs market is losing steam following the EU referendum.
The figures from the Office for National Statistics showed the number of people out of work fell by 16,000 to 1.62 million. The employment rate edged lower to 74.4% in the three months to October, from a record high of 74.5% according to the Office for National Statistics. It was the first drop since February to April 2015, triggered by a 6,000 fall in the number of people in work to 31.76 million.
However, economists including those at the Bank of England have warned that unemployment will rise in 2017, as the broader economy slows and businesses grapple with higher costs and waning demand. Meanwhile, the number of people claiming unemployment benefits rose by 2,400 in November to 809,000.
More details soon ... John Philpott, employment expert and director of The Jobs Economist, said a rise in public sector jobs was not enough to offset a fall in private sector employment.
“The UK labour market finally appears to be suffering a bout of post-Brexit vote blues which is now hitting recruitment. The UK labour market looks to have entered a somewhat slower time.”
The latest official report on Britain’s jobs market was mixed, with unemployment down 16,000 over the three months to 1.62 million and the jobless rate unchanged at 4.8%.
Average pay growth picked up more than expected to 2.6%, or 2.5% excluding bonuses, from 2.4%. But the number of people aged 16 to 64 considered “economically inactive” – out of work and neither seeking nor available to work – jumped by 76,000 over the period to 8.9 million.
The ONS said there were signs the UK jobs market was softening. David Freeman, senior statistician, said: “The labour market appears to have flattened off in recent months. While the employment rate remains high, it is slightly down on the record set recently. Meanwhile a small fall in unemployment on the quarter was more than offset by a rise in economic inactivity.”
Economists including those at the Bank of England have warned that 2017 will be tougher for UK workers and consumers. Unemployment is expected to rise as the broader economy slows and businesses grapple with higher costs and waning demand. Meanwhile higher inflation is expected to squeeze household finances at a time of weak wage growth.
Commenting on the latest ONS figures, Suren Thiru, head of economics at the British Chambers of Commerce, said: “It is likely that UK unemployment will start to drift upwards in the coming months, as uncertainty over Brexit and the increasing input costs faced by businesses weigh on jobs growth. However, while we currently forecast the unemployment rate will peak at 5.5% in early 2018, this is still well below the long-term average.”