Britain’s employment rate has risen to a record high, quashing recent fears that the job boom may be coming to an end and sending the pound to its highest level since the Brexit vote.
The number of people in work rose by 102,000 between last September and November, taking the total employment number to a record 32.2 million and stunning economists who had been expecting a fall of 13,000.
James Athey, an investment manager at Aberdeen Standard Investments, said that the figures demonstrated that the economy was “on a firmer footing than many had anticipated following the EU referendum vote”.
The Office for National Statistics said that the employment rate was now 75.3 per cent, the joint highest level since records began in 1971, as Britain continued a remarkable period of job creation that began in 2012.
The pound rose to $1.41 on the news, its highest level against the dollar since the EU referendum in June 2016, putting sterling on track for its best month against the US currency since 2010.
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The figures are likely to dispel concerns about a loss of momentum in the labour market that was seen in the previous two months. Figures for October revealed that the number of people in work had fallen by the largest amount in almost three years, but economists are now treating this as a blip.
John Hawksworth, chief economist at PWC, said: “Today’s labour market data showed the UK jobs engine kicking back into life.”
Alan Clarke, an economist at Scotiabank, called the figures a “staggering bounce back after a couple of mediocre months”.
The unemployment rate remained at a 42-year low of 4.3 per cent. There were 1.4 million people unemployed between September and November, 160,000 fewer than a year earlier, and the lowest rate since 1975.
The demand for workers shows no sign of abating. The number of vacancies jumped to a record high, increasing by 17,000 to 810,000 compared with the previous three months. The biggest demand for staff was in social work, wholesaling and car mechanics.
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Previous analysis by the Bank of England has suggested that vacancies can often be artificially high, however, because it costs little to advertise for staff. Often employers are merely fishing for better workers. Employers also appear to be leaning towards employing workers permanently rather than for temporary work. The number of full-time jobs rose by 173,000, while jobs that were part-time or self-employed fell by 89,000.
The issue of sluggish wage growth continues to be a dark cloud. Average weekly earnings excluding bonuses rose by an annual rate of 2.4 per cent in the three months to November. This was below the rate of inflation, which reached a near six-year high of 3.1 per cent in November, and means that wages fell by 0.5 per cent in real terms compared with a year earlier.
Stephen Clarke, research and policy analyst at the Resolution Foundation, a think tank, said: “While the squeeze is likely to ease in the coming months, we’re still £15 below the 2008 peak for average weekly earnings.”
