Unemployment in the UK recorded its first increase in 18 months in the last quarter of 2017 despite the number in work hitting a new high.The 1.47 million people unemployed at the end of the year was up 46,000 on the previous quarter – the biggest rise since 2013 – although the jobless total was still 123,000 lower than a year earlier.

People in work continues to increase

Data from the Office for National Statistics (ONS) also showed that the number of people in work increased by 88,000 to 32.1 million. The number of workers from outside the EEA declined to 1.17 million in December, 68,000 fewer than a year earlier.Matt Hughes, ONS statistician, said, “While this is the sharpest increase in the unemployment level ONS has seen in almost five years, the number of people in work has continued to rise and there are fewer economically inactive people.“Rising employment this past year was largely driven by UK nationals. In particular, fewer citizens from eastern European countries were in work than in the year before. It’s important to remember these figures simply look at the number of people in work, and aren’t a measure of migration.”Employment Minister Alok Sharma said, “High employment rates are a reliable feature of today’s economy – and this is an incredible achievement. It is equally important that, across society, everyone has the opportunity to get a good job, and get on in life.“Today’s figures show that this government is building a fairer economy that supports people from all backgrounds to get into work. We are closing the BAME and gender employment gaps, and people across the country are accessing new opportunities.”

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Unemployment growth a warning rather than a crisis

Ian Brinkley, acting chief economist at the Chartered Institute of Personnel and Development, commented, “The substantial and unexpected rise in unemployment is a clear warning that the UK labour market may be running out of steam, but there are reasons to believe that this is a one-off, as opposed to the beginning of a larger employment crisis.“There has still been a significant rise in employment dominated by an increase in full-time, permanent jobs, while some of the rise in unemployment may be attributed to more students entering the labour market.“The strengthening of wage growth is also a welcome sign as, when coupled with likely falls in inflation, it opens up the possibility of real wage growth in the coming months, which will be a great relief to those workers who have seen their pay packets squeezed for months on end.”John Hawksworth, chief economist at PwC, added, “There was an unexpected rise in unemployment between the third and fourth quarters of 2017, but closer inspection suggests this is not a sign of labour market weakness as it was also accompanied by a healthy rise in total employment, focused on full-time jobs.“Instead, it reflects more previously inactive people seeking work, some of them finding jobs and others still searching and so being classified as unemployed.”

Mixed picture of the jobs market

Geraint Johnes, professor of economics at Lancaster University Management School, said the ONS data represented a mixed picture of the jobs market. “The increased unemployment has been quite uneven across the UK, with marked increases in Wales, Scotland and the East but falls in some other regions. Meanwhile, across the UK the number of workers in employment also increased, as a result of a fall in the numbers who are economically inactive,” he said.

Equal pay concerns

A report from the government’s Equalities Office showed that 84 per cent of large organisations in the UK are paying male staff members more than women on average.Based on returns from more than 1,000 businesses and civil authorities with more than 250 staff, the report said 908 were paying men more than women, compared to 143 who were paying female employees more than their male counterparts.Only 30 organisations – three per cent – reported no difference between the sexes. 

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Read more about UK business in the Winter issue of our magazine 

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