Round-up of the weekPosted on 19th August 2016
Employment rate reaches record high
The employment rate in the UK has risen to its highest level on record, the Office for National Statistics (ONS) has revealed.
According to the body's latest labour market report, the employment rate rose to 74.5 per cent between April and June 2016.
Meanwhile, the unemployment rate dropped to 4.9 per cent - its lowest level in more than a decade.
This means the number of people in work has risen by more than 600,000 in the past year, taking the overall figure up to a record high of 31.75 million.
The data has been hailed by Damian Hinds, the employment minister, who said the record-breaking figures are "great news as we build a Britain that works for everybody, not just the privileged few".
"We’re in a position of strength, but we can’t be complacent, which is why we’re pressing ahead with our welfare reforms like Universal Credit to ensure it always pays for people to be in work," he commented.
"The job now is to build on this success story so that everybody can benefit from the opportunities that are being created regardless of who they are or where they come from."
Responding to the ONS's figures, the Recruitment and Employment Confederation said the UK labour market performed well in the run-up to the EU referendum.
Chief executive Kevin Green said: "It is encouraging to see wage growth continue to rise at 2.4 per cent, up on the month before.
"With inflation now predicted to exceed the Bank of England’s two per cent target next year, it’s important that employers use pay and benefits to retain their people as skill and talent shortages continue to be a problem."
Mr Green went on to state that while his organisation's figures suggest permanent hiring dropped straight after the referendum, it is "still too early to draw conclusions about the implications for the vote to leave the EU on the jobs market".
"Today’s ONS data shows the jobs market fundamentals are strong and this puts the UK in a good position to bounce back from the initial shock," he added.
Business community responds to labour market data
The British Chambers of Commerce (BCC) has welcomed the figures, stating that the UK jobs market continued to get stronger in the lead-up to the EU referendum.
Indeed, BCC head of economics Suren Thiru noted that firms continued to recruit "despite a softening economic picture".
However, he pointed out that labour market indicators tend to "lag behind the wider economy". As a result, he believes it will be some time before the "full post-referendum employment picture emerges".
Mr Thiru also stressed that more needs to be done to boost business confidence, so that firms can continue to grow and recruit.
This, he stated, should include careful consideration on how initiatives such as the apprenticeship levy and national living wage are implemented.
The CBI, meanwhile, said the UK's job market appears to have been in "rude health" prior to the referendum.
Nevertheless, head of economics analysis and surveys Anna Leach noted that vacancies have "continued to tick down since the beginning of the year".
"The Bank of England was right to act swiftly to shore up confidence and keep money flowing through the economy," she commented.
"But businesses now need the government to make ambitious decisions in the Autumn Statement that will secure the UK’s economic future as changes to trade, regulation and access to skills loom on the horizon."
To discuss conditions in the labour market and operating environment further, speak to one of our experts here at The Maine Group!