UK extends employment boom with 32.9m people at work
The number of people in work in Britain jumped again at the end of last year, underscoring how the labour market defied the broader economic slowdown in the run-up to December’s UK election.
The number of people in work jumped by 180,000 in the October-December period, to 32.93m. Full-time employment accounted for most of the growth, while self-employment also rose strongly, Britain’s Office for National Statistics showed.
Signs of weakness in the labour market in the autumn — when Britain faced deep uncertainty about Brexit and the outcome of a polarising national election — prompted two Bank of England interest-rate setters to vote for a cut to borrowing costs.
But the Bank of England’s other seven rate-setters backed keeping borrowing costs on hold, amid signs that the economy has picked up, following prime minister Boris Johnson’s election triumph on December 12.
The number of people out of work dropped by 16,000, to 1.29m, the ONS data showed.
The unemployment rate, of 3.8%, remained at its joint lowest level since early 1975.
In another sign of confidence among employers about hiring, vacancies in the three months to January rose to 810,000.
“The jobs market remains remarkably robust, with employment levels rising, despite the UK economy stalling at the end of last year,” said Suren Thiru, head of economics at the British Chambers of Commerce.
“However, the strong headline figures mask underlying problems. Lingering economic uncertainty can mean companies hire staff to fill orders rather than investing for the long-term, weakening productivity,” the economist said.
The data showed Britain’s productivity growth — the flipside of strong increases in jobs — remains a problem.
While the year-on-year productivity growth rate was the strongest since the second quarter of 2018, the ONS said the numbers did not represent a breakthrough.
Many employers fear that Brexit-related uncertainty will return in 2020. Growth in pay has also slowed in recent months. Total earnings growth, including bonuses, rose by an annual 2.9%, the weakest gain since the three months to August 2018. Excluding bonuses, pay growth also slowed, to 3.2%.
“In real terms, regular earnings have finally risen above the level seen in early 2008, but pay, including bonuses, is still below its pre-downturn peak,” an ONS statistician said.
