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Round-up of the week

Posted on 22nd April 2016

UK employment rate at record high

The UK employment rate stayed at 74.1 per cent in the three months to February 2016, the Office for National Statistics (ONS) has confirmed.

According to the latest figures, 31.4 million people in the UK are now in work - 360,000 more than a year earlier.

This increase was largely fuelled by a surge in full-time employment, as this accounted for 80 per cent of the annual upturn. 

Figures also showed that the number of vacancies rose to 751,000 - which is close to a record high.

Furthermore, average wages before bonuses went up by 2.2 per cent year-on-year, with salaries in the private sector doing particularly well with an increase of 2.5 per cent.

Stephen Crabb, the work and pensions secretary, commented: "We remain in a position of strength, with a record employment rate, wages continuing to grow steadily and three-quarters of a million vacancies available in the labour market.

"Work is essential in transforming the lives of the most disadvantaged people in society and is at the heart of our welfare reforms. We are committed to ensuring that everyone across the country benefits from our strong economy and the opportunities this brings."

Business community responds to labour market data

Britain's business leaders have given a mixed response to the figures, with the CBI admitting it is surprised to see signs that the labour market is levelling off given ongoing uncertainty in the economy.

However, Neil Carberry, director for employment and skills at the body, pointed out that employment is growing at its slowest rate since last summer, while unemployment rose slightly.

"Employers are also having to take on increased costs associated with a range of new policies on wages and skills, which may have delayed growth plans," he commented.

David Kern, chief economist at the British Chambers of Commerce, added that while the employment rate is at a joint record high, overall the latest data is "slightly disappointing".

"While we must not give undue weight to one month’s figures, our own economic survey confirms that the pace of economic activity in the UK is slowing, and the recovery remains fragile," he commented.

The BCC also pointed out that businesses are facing a growing skills shortage that represents a "genuine threat to future productivity and growth".

Dr Adam Marshall, acting director-general of the BCC, said: "Unemployment is low by historic standards and our own survey work confirms that the percentage of firms reporting recruitment difficulties is close to an historic high, with firms facing a real struggle to find staff with the right skills."

He called for greater investment in human capital and staff training, as well as more of a focus on ensuring school leavers have the skills they need to "compete successfully in an increasingly global marketplace".

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