UK employment rate remains at record high
The latest official quarterly figures show the UK employment rate remains at a record high of 74.5 percent and unemployment is holding steady at an 11-year low of 4.9 percent.
The Office for National Statistics (ONS) labour market figures for October 2016 show there were 31.81 million people in work in the UK in the 3 months leading up to August 2016. This is 106,000 higher than the March to May figure, and 560,000 higher than for the same time last year.
The ONS say while the number of unemployed people rose by 10,000 between the March-May and June-August quarters, at 1.66 million it is 118,000 fewer than for a year earlier. Unemployed people are defined as people not in work but seeking and available for work.
Businesses have cautiously welcomed the rise in employment figures and look to the chancellor’s Autumn Statement to boost confidence. Image: pixabay
Meanwhile, average weekly earnings rose by 2.3 percent compared with a year earlier. This is slightly lower than the growth rate for the previous month (2.4 percent).
Business groups have welcomed the figures, with some reservations. The Confederation of British Industry (CBI) note the “decent pace” of continued employment growth, and suggest it paints a “picture of ongoing strength in the labour market.”
However, they say “earnings growth remained lacklustre,” and point out that real average earnings – pay adjusted for inflation – grew by only 1.7 percent, the slowest since February 2015.
Similarly, Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), says while they welcome the rise in UK employment, the rise in jobless rate – albeit small – is the first rise in unemployment for a while. Also, the rise in employment was smaller than it has been in recent quarters.
“The post-referendum labour market picture is unlikely to fully emerge for some time,” says Thiru, “but our own survey data suggests that businesses have lowered their expectations over hiring more staff, and investing.”
Increase in self-employed people
The ONS figures also show that compared to last year, the number of self-employed people has risen by 273,000 to 4.79 million, and this group now represents 15.1 percent of all people in work.
Mike Cherry, National Chairman at the Federation of Small Businesses (FSB) says the FSB also welcomes the rise in UK employment and notes that the trend reflects their own research that shows small businesses were beginning to take on more staff in the last quarter. Commenting on the self-employment figures, he adds:
“Increasing levels of self-employment should be celebrated for the freedom and flexibility it provides to millions of people. But changes in how people work means there must be changes in how they’re supported as well.”
He says the FSB welcomes the recently announced Taylor review into modern employment practices and they will continue to push for the support that self-employed people in the UK need, such as access to pensions, mortgages, income protection. He says there is also a need to close gaps between self-employed and employed people in the social security system, for instance on maternity pay.
Looking to Autumn Statement
Given the political and economic uncertainties that have followed the Brexit referendum vote to leave the EU, and perceived higher costs from policy changes like the National Living Wage, British businesses are looking to the chancellor’s Autumn Statement to bring reassurances and boost confidence.
Cherry says it is “crucial the Government doesn’t place extra burdens on business, prioritizes long-term investment, enterprise policy and innovation, and reaffirms the commitment to permanently increase business rate relief.”
“Next month’s Autumn Statement is a great chance for the government to pull out all the stops to support business confidence – and firms will repay that backing with investment, hiring, training and export growth,” Thiru adds.
Last month, the BCC presented the chancellor with a seven-item wish list for what they would like to see in the Autumn Statement.
BCC Director General Adam Marshall says the “Autumn Statement gives the government a great chance to set the tone for its relationship with British business, by pulling out all the stops to support investment, infrastructure improvements, and business confidence.”
“Westminster must do everything in its gift to improve the business environment,” he says, and adds:
“Plans to lower business costs and support investment would help firms take risks and seize opportunities in spite of the ongoing uncertainty surrounding the Brexit process.”