The UK’s unemployment rate has remained at its lowest level for more than four decades, according to official data.
Data from the Office for National Statistics, released this morning, reveals in the quarter to July unemployment dropped by 55,000 to 1.36m, while the number of people in work rose by 3,000, taking total employment to 32.397m. Wages, meanwhile, grew by 2.9% above the current 2.4% inflation rate.
However, commenting on the figures, Pawel Adrjan, UK economist at the global job site Indeed, warned economic gravity was “inexorably” catching up with Britain’s job creation boom: “The economy is still creating new jobs – just. But the rate at which it does so has slipped from prodigious to ponderous.
“Two successive falls in the employment rate is hardly a reversal of fortune. For months the figure has been knocking against the ceiling of what economists thought possible as Britain hovers close to full employment.
“Meanwhile with the unemployment rate remaining flat – at its lowest level for 43 years – and the number of EU nationals in Britain on the slide, the tightness of the labour market is finally starting to translate into higher wages.
“As the pool of available talent shrinks, employers are having to fight harder for every new recruit. Companies are tapping into the large number of people in part-time work who want to work more hours, and are notching up pay packets in an attempt to attract new staff.
“Nevertheless, recent wage rises remain modest at best, and average pay is still below its pre-crisis peak in 2008. If real wages had continued growing at their pre-crisis trend, the average person would now be earning £130 more per week than they actually do.”
Meanwhile Alpesh Paleja, principal economist at UK business organisation CBI, said: “While employment growth tailed off, much of this seems to be related to a rise in inactivity. Overall, the labour market remains tight, with unemployment still at its lowest since 1975.
“The flexibility of the UK’s labour market is a key strength of the economy, giving the UK a competitive edge on the world stage and allowing innovative businesses to grow and flourish.”
Also commenting, Julia Kermode, CEO of trade body The Freelancer & Contractor Services Association (FCSA), pointed to the high number of job vacancies and wage increases, meaning employers are paying more to attract the talent and skills they need for their businesses.
“In the current labour market, it seems that employers are struggling to fill their roles which is not surprising given the widely reported skills shortages in some sectors.
“Businesses may need to rethink how to attract the candidates they need, and while wages are clearly an important factor, flexible working practices are always near the top of jobseekers’ wish-lists. Businesses might also want to consider the advantages of having a contingent workforce, which they can call on an as-needs basis – bringing much-needed flexibility for both UK plc and the workers themselves.”