UK Employment Reaches New High

UK Employment Reaches New High

The UK’s employment rate rose to a record high of 74.5% in the second quarter of 2016, with the Office for National Statistics also reporting that the number of people in work reached a record high of 31,750,000, up by 172,000 on the first quarter. Only 4.9% of the economically active population are unemployed, as the number of people out of work fell by 52,000 to 1,640,000.

The employment rate data covers the period from April to June 2016, hence the referendum vote to leave the European Union occurred only days before the end of the period, and we will need to wait for the release of the third quarter data to get a full sense of what impact the Brexit vote has had on the numbers of people employed.

However, encouraging data from the jobs market is already available for July 2016, the first full month since the referendum. During this month, the number of people claiming unemployment benefit fell by 8,600, meaning that companies in general have not reacted to the vote by laying off staff.

Average wages rose by 2.4% in the second quarter, and salaries continue to rise well in excess of the cost of living.

Scott Bowman at Capital Economics said:

“Today’s figures showed that the UK labour market brushed off pre-referendum uncertainty which should provide a solid base for the hit from the vote to leave the EU.”

Hargreaves Lansdown economist Ben Brettell said that:

“Today’s claimant count number is a tentative sign that things might not turn out as bad as many predicted [after Brexit].”

Employment Minister Damian Hinds MP commented:

“The 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.”

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