UK employment rate and job vacancies at record high

The number of people in employment in the UK has hit a record high while wage growth is at its greatest for 10 years, according to official data released on Tuesday.

Rise in jobs vacancies indicates skills shortages in UK business sectors

Meanwhile, the number of job vacancies rose by 10,000 over the quarter to November to an all-time peak of 853,000, reflecting the skills shortages being reported by many UK business sectors. The figures prompted a call from the British Chambers of Commerce (BCC) for a post-Brexit immigration system "that helps, rather than hinders" businesses.The number in work in the three months to November increased by 141,000 people to reach a total of 32.53 million, representing a record employment rate of 75.8 per cent, said the Office for National Statistics (ONS).At the same time, annual wage growth, excluding bonuses, increased to 3.3 per cent over the quarter, the highest rate since November 2008 and representing a take-home rise of 1.1 per cent once inflation is taken into account.

Unemployment at a 40 year low

David Freeman, head of labour market statistics at the ONS, said, “The number of people working grew again, with the share of the population in work now the highest on record.“Meanwhile, the share of the workforce looking for work and unable to find it remains at its lowest for over 40 years, helped by a record number of job vacancies.“Wage growth continues to outpace inflation, which fell back slightly in the latest month.”The unemployment rate dipped unexpectedly to four per cent from 4.1 per cent, although the number claiming unemployment benefit actually increased marginally by 8,000 to leave the jobless total at 1.37 million.Suren Thiru, head of economics at the British Chambers of Commerce, said, “The continued rise in the number of vacancies is further evidence of the growing struggle for firms to hire the staff they need, which is weakening the UK’s growth and productive potential.

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Calls for immigration system to fill the skills gap employers are experiencing

"Against this backdrop, more must be done to protect the long-term health of the UK labour market, including delivering a future immigration system that helps, rather than hinders businesses ability to invest, grow and support the economy."The prime minister’s announcement that there will no longer be a cost for EU nationals to apply to the Settled Status Scheme is a welcome move for the many businesses that are concerned about losing European employees after Brexit.”Samuel Tombs, chief economist at Pantheon Macroeconomics, said the rise in wages strengthened the case for an interest rate rise “even if the Brexit outlook remains uncertain”.He added, “The chances of the Monetary Policy Committee raising rates in February are remote, but the committee will want to signal strongly that another hike is not far off and that it could hike before Britain has left the EU, given the risk that the departure could be delayed beyond March."

Rise in wages strengthens case for increase in interest rates

Mr Tombs suggested that while wage growth was likely to fall back somewhat over the first half of the year because of lower public sector wage rises, the rate should still stay above three per cent.Yael Selfin, chief economist at KPMG UK, warned that businesses were facing an increasing shortage of workers as the number of candidates applying for vacancies falls.“The ability to find the right staff will be an acute concern for UK businesses,” he said. “The UK labour market could enter a perfect storm of declining worker availability and a tight domestic labour market.“These shortages could be more acute across regional labour markets, especially considering the rate of unemployment has reached 3.1 per cent in the east and the south-west of England already.”Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Access hundreds of global services and suppliers in our Online DirectorySubscribe to Relocate Extra, our monthly newsletter, to get all of the international assignments and global mobility news.

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