UK creates more jobs, higher wages and more vacancies

UK jobs market defies Brexit and economic slowdown to remain strong with more in work, job vacancies at a record high and continued wage growth.

Later holds a job advert
The UK labour market shows no signs of slowing down yet because of Brexit uncertainty with official figures on Tuesday showing the number in work and the number of vacancies both at a record high.

Number in work and number of vacancies at a record high

Data from the Office for National Statistics (ONS) also showed that wages grew at 3.4 per cent in the final quarter of 2018, well ahead of the inflation rate, which dipped below the government's two per cent target in January.The employment rate of 75.8 per cent was the joint highest since records began in 1971, with the total in work reaching a record 32.6 million.Meanwhile, the number out of work fell by 14,000 to 1.36 million over the quarter, 100,000 lower than a year earlier and representing an unemployment rate of four per cent, the lowest since 1975.The number of economically inactive people fell by 94,000 to 8.6 million, constituting a record low rate of just under 21 per cent, while vacancies increased by 16,000 to a record high of 870,000.Matt Hughes, ONS senior statistician, said, "The labour market remains robust, with the employment rate remaining at a record high and vacancies reaching a new record level.

Unemployment rate for women drops below 4 per cent for first time

"The unemployment rate has also fallen, and for women has dropped below four per cent for the first time ever. Most of the growth in employment over the past year is among British nationals."Nevertheless, the ONS said the number of overseas nationals in work was still increasing, with a decrease in workers from the Eastern European countries that joined the EU in 2004, offset by an increase in people from non-EU nations.An estimated 2.27 million EU nationals working in the UK in the latest quarter, 61,000 fewer than a year earlier, while the number of non-EU nationals increased by 130,000 to 1.29 million.Employment Minister Alok Sharma said, "While the global economy is facing many challenges, particularly in sectors like manufacturing, these figures show the underlying resilience of our jobs market - once again delivering record employment levels."Our pro-business policies mean we have started the new year with a strong labour market, with wages outpacing inflation for the 11th month in a row, and more people in work than ever before. It's also excellent news that we see the rate of women in employment at a record high."Of course, we need to ensure that we continue to provide one-to-one support for anyone whose jobs may be at risk, or who might be looking to move to a new role."

Number of EU nationals falls whilst non-EU nations increases

Suren Thiru, head of economics at the British Chambers of Commerce, said the data showed the UK jobs market remained resilient, with firms continuing to recruit despite an increasingly challenging economic backdrop.He added, “With earnings growth holding steady, the gap between pay and price growth remains significant, providing some welcome respite to financially stretched households. However, the uplift to consumer spending from the recent improvement in real pay growth is likely to be limited by weak consumer confidence and high household debt levels.“The increase in the number of vacancies to a new record high confirms that labour and skills shortages are set to remain a significant a drag on business activity for some time to come, impeding UK growth and productivity.“It is therefore vital that with less than 40 days to go until the UK is scheduled to exit the EU, businesses urgently get the clarity they need on the key unanswered questions in a ‘no deal’ scenario, including the information they to need to plan for their own workforce needs such as how firms can move skilled staff between the UK and EU in the unwelcome event of a messy and disorderly Brexit on March 29.”

Employers remain optimistic about taking on new staff

Jon Boys, labour market economist for the CIPD, the professional body for HR and people development, commented, “Not only is employment at a record high but the increase in jobs is largely driven by full-time roles. This is good news for jobseekers.“Today’s official data takes us up until the end of 2018. However, the CIPD’s more recent data suggests that employers expect that both employment and wage growth will stay strong throughout the first quarter of 2019. Nominal wage growth is being driven by the demand for skills. With low inflation expected to continue for most of the year we can expect a real terms pay rise for many in 2019.“For now, most employers remain optimistic about their ability to take on new staff but with Brexit just a matter of weeks away it’s uncertain how the mood will change after March. To prepare for this, it’s vital that employers plan for a number of possible scenarios for their workforce."While there’s optimism around hiring, access to skills continues to be a challenge for employers. With fewer EU nationals working in the UK as the same time last year, it’s vital that the government recognises the need for a flexible post-Brexit migration system to avoid worsening skill and labour shortages.”Tej Parikh, senior economist at the Institute of Directors, added, "The labour market is a bulwark for the UK economy just as it enters a testing period."Businesses have shown resilience in the face of uncertainty by opening new positions and hiring at a rapid pace. The jobs boom in turn has provided uplift to the economy, bringing more people into work and helping support household incomes.“With wages now rising above inflation, workers will feel their pay packets going even further, which should give some reprieve for embattled retailers down the line."EY Item Club economist Howard Archer said it "remains to be seen" whether the labour market could retain its strength in the coming months amid Brexit uncertainty.Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Global Mobility Toolkit download factsheets resource centreAccess hundreds of global services and suppliers in our Online DirectoryClick to get to the Relocate Global Online DirectorySubscribe to Relocate Extra, our monthly newsletter, to get all of the international assignments and global mobility news.

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