UK jobless total falls again – record number in work

The UK's unemployment rate has fallen to its lowest in more than decade with a new record in the number of people in employment, official figures revealed on Wednesday.

UK workers canary wharf
With a jobless rate standing at 4.9 per cent - representing 1.65 million people unemployed - in the three months to May, the Office for National Statistics (ONS) said the employment rate had hit 74.4 per cent with 31.7 million in work, 176,000 more than in the previous quarter.However, the data pre-dates the June referendum that resulted in a vote to leave the European Union – a move that many analysts fear will result in a marked cooling in employment prospects.Paul Hollingsworth, UK economist at Capital Economics, commented, "The vote to leave the EU will almost certainly now cause some firms to put hiring decisions on hold or cut back headcounts altogether. Indeed, we expect the unemployment rate to begin to drift up over the coming quarters. The upshot is that these may be the best set of labour market figures for a while."The Bank of England expressed similar sentiments in its monthly summary of business conditions, which was also published on Wednesday. "A majority of firms spoken with did not expect a near-term impact from the result on their investment or hiring plans," it said. "But around a third of contacts thought there would be some negative impact on those plans over the next twelve months."However, newly-appointed Work and Pensions Secretary Damian Green welcomed the ONS data. "This remarkable set of figures shows that there are more people in work than at any other point in our history, which is fantastic news as we build a Britain that works for everybody, not just the privileged few."We've entered a period of significant change, but when it comes to our jobs market we're in a position of strength, with over 2.6 million more people in work than there were in 2010, the number of workless households cut to an all-time low, 750,000 vacancies in the economy and wages rising too."Our 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. Encouragingly, employment has risen in all regions and nations of the UK over the last year."The total unemployed is now the lowest for eight years, while the rate is the lowest since the summer of 2005. Job vacancies stood at 747,000, down 10,000, while, in the year to May, average earnings rose 2.3 per cent.Nick Palmer, ONS statistician, said, "The labour market continued to strengthen in spring 2016, with record employment and the unemployment rate at its lowest since 2005. None of today's headline figures cover the period since the result of the EU referendum became known."Samuel Tombs, chief UK economist at Pantheon Macroeconomics, sounded a note of caution, saying that if the unemployment number does start to rise, it could take the momentum out of wage growth. "Rising unemployment and falling job vacancies, is likely to, ensure that wage growth does not respond fully to the looming pick-up in inflation," he said.But Welsh Secretary Alun Cairns said, "Brexit will mean significant challenges but entrepreneurs thrive on change. Business leaders are telling me they are optimistic about the future and excited about export opportunities further afield."

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