Round-up of the weekPosted on 22nd January 2016
Employment reaches record high
The employment rate in the UK has risen to a record high of 74 per cent, new figures have revealed.
According to the Office for National Statistics (ONS), 31.4 million people are now in work - over half a million more than at this time last year.
This coincided with a two per cent increase in wages, while unemployment has fallen to its lowest level since early 2006.
Priti Patel, the employment minister, commented: "This is a record-breaking set of figures and has got 2016 off to a fantastic start.
"There are now more people in work than ever before and wages are growing - a credit to hard-working Brits and businesses alike."
Ms Patel went on to point out that there are now 750,000 vacancies across the country, which is a further demonstration of the current strength of the labour market.
Business community hails jobs figures
The ONS labour market data has been welcomed by leading figures in the UK's business community.
According to the CBI, the figures reflect strong domestic demand and the importance of maintaining flexibility.
Matthew Fell, chief of staff at the CBI, said the labour market "continues to be a bright spot for the UK economy". However, he pointed out that with global risks "ramping up", this is not the time to become complacent.
The British Chambers of Commerce was similarly cautious, with chief economist David Kern saying that while the "vibrant and dynamic" labour market is a source of strength at a time of major uncertainty, various problems still need to be overcome.
For example, he pointed out that youth unemployment is still much higher than the national average, even though it is lower than it was prior to the downturn in 2008.
The Institute of Directors (IoD) added that the jobs figures "could be just what the doctor ordered", since "storm clouds" are gathering across the global economy.
IoD economist Michael Martins said firms in the UK are upbeat and therefore creating jobs, to the point where the absolute number of people in work and the headline employment rate are both at record highs.
Sentiment improving in financial services sector
The financial services industry saw a further increase in sentiment in the final three months of 2015.
According to the CBI and PricewaterhouseCoopers (PwC), it was only a marginal improvement, but it still represents the second successive quarterly upturn.
A survey by the two organisations also found that conditions within the sector are still "generally favourable", with firms seeing an increase in business volumes and levels of growth that exceeded expectations.
This recovery was said to be broad-based, with only the banking sector seeing volumes staying largely stable, and occurring across all customer groups.
The CBI and PwC added that while incomes are being put under pressure by strong competition, tight cost control is "helping to support growth in profitability".
To discuss conditions in the labour market further, speak to one of our experts here at The Maine Group!