Round-up of the week

Employment reaches record high

The number of people in work in the UK has reached its highest level on record, the Official for National Statistics (ONS) has revealed.

According to the latest labour market data for March 2016, the UK's employment rate is now 74.1 per cent, with the overall number of people in work now standing at 31.42 million.

Figures also showed that private sector employment is at a record high of 26.1 million, while the overall unemployment rate is at its lowest point in ten years at 5.1 per cent.

Priti Patel, the employment minister, commented: "This is another strong set of figures showing private sector employment at the highest since records began, wages rising and a near record number of job vacancies available in the UK economy. This strength is a real credit to hard-working people and businesses alike."

Businesses respond to Budget

Chancellor of the Exchequer George Osborne delivered his Budget in parliament this week and there was plenty for business leaders to mull over.

Perhaps the most eye-catching announcement was that the annual threshold for 100 per cent relief on business rates for small firms is to rise from £6,000 to £12,000, while the higher rate will go up from £18,000 to £51,000.

This has been welcomed by the CBI, which also praised the news that the headline rate of corporation tax is to fall from 20 per cent to 17 per cent by 2020.

Carolyn Fairbairn, director-general of the CBI, commented: "After a year of surprises, this was a stable Budget for business facing global stormy waters.  The chancellor has listened to our concerns about the mounting burden on firms and chosen to back business to grow the economy out of the deficit."

Dr Adam Marshall, acting director-general of the British Chambers of Commerce (BCC), added: "Business wanted a steady, workmanlike Budget, and that’s what we got. The chancellor listened to our calls to avoid higher business taxes and costs - and indeed moved to lower them in a number of areas. He has finally taken real action to lessen the crushing burden of business rates, and sharpened incentives for entrepreneurship and investment."

Dr Marshall went on to commend the chancellor's commitment to key business infrastructure projects, but said he must make sure they move from the drawing board to "speedy construction on the ground".

Bank of England urged to stick with low interest rates

The Bank of England this week decided to keep interest rates on hold at their historic low of 0.5 per cent.

According to the BCC, the UK economy is set to face a number of challenging circumstances over the coming year.

Indeed, it pointed out that the Office for Budget Responsibility (OBR) has just downgraded the UK's growth forecast for 2016 to two per cent, compared with the 2.4 per cent predicted a few months ago.

As a result, chief economist David Kern believes the decision to freeze rates is unsurprising and could lead to less pressure to implement a hike.

"A rise in interest rates is now likely to remain off the table for the foreseeable future," he commented. "While inflation and rates remain low, the government’s priority must be on creating a stable business environment to support growth, and making it easier for SMEs, particularly exporters, to obtain finance on competitive terms."

To discuss conditions in the labour market and operating environment further, speak to one of our experts here at The Maine Group!