U.K. Labor Market Shows Surprise Strength as Employment Rises
Wednesday, 24 January 2018 16:52 WIB |
ECONOMY |Ekonomi inggrisUK Unemployment
The U.K. labor market displayed unexpected resilience in the three months through November as employment rose and wage growth ticked higher.
The number of people in work rose 102,000 to a record high, confounding market expectations that employment would fall. Basic pay growth quickened to 2.4 percent, the highest in almost a year, though it still lags well behind the rate of inflation.
Unemployment fell by 3,000 during the period, leaving the jobless rate at a 42-year low of 4.3 percent, the Office for National Statistics said Wednesday. Inactivity dropped to its lowest since the winter of 2000-01 and there were a record number of vacancies.
œDemand for workers clearly remains strong, said ONS statistician David Freeman.
The amount of slack in the labor market is central to the debate at the Bank of England, where policy makers raised interest rates for the first time in a decade in November amid concern that poor productivity had lowered the economy's œspeed limit.
Surveys suggest firms are facing growing recruitment difficulties and BOE policy maker Michael Saunders said last week that unemployment could drop below 4 percent this year and underlying earnings growth accelerate to 3 percent or above.
The question is whether the labor market will come under pressure as the economy loses momentum, with the U.K. forecast to join Italy and Japan at the bottom of the Group of Seven growth league this year.
Britain is preparing to leave the European Union in just over a year and real earnings are continuing to decline, with wages lagging behind inflation currently running at 3 percent.
Single month figures show employment rising by 505,000 in November alone, the biggest increase since September 2013. The increase in the latest three months was driven by full-time employees.
Source : Bloomberg