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Jobs market resilient post-Brexit as employment rate hits 45-year high

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Written by: Paloma Kubiak
16/11/2016
The employment rate increased in the three months to September to reach the highest level since records began, official statistics reveal.

The number of people in work rose by 49,000 during the period to 31.8 million – 461,000 more than a year earlier.

According to the Office for National Statistics (ONS), the employment rate which is the proportion of people aged 16-64 who were in work was at 74.5%, the joint highest since comparable records began in 1971.

There were 1.6 million unemployed people seeking work, which is 37,000 fewer than for the preceding three months and 146,000 fewer than a year earlier.

The unemployment rate stood at 4.8%, down from the 5.3% recorded in the same period last year to reach the lowest level since the third quarter of 2005.

Wage growth remained unchanged at 2.3% in the three months to September.

Labour market resilience but storm clouds gathering

Ben Brettell, senior economist at Hargreaves Lansdown, said the UK’s labour market continues to surprise with its resilience to the Brexit shock.

“This is yet more evidence that the labour market and the wider economy have fared better than expected since June’s referendum,” he said.

“However, there could be storm clouds gathering on the horizon. The claimant count – which in a quirk of the data is a more recent figure than the unemployment rate – jumped by 9,800 in October, with September’s figure revised upwards from 700 to 5,600. All in all, it does seem likely that unemployment could tick up somewhat during the coming months, though dire predictions made in the immediate aftermath of the vote appear wide of the mark.”

While wage growth held steady, Brettell said it is “probable” pay will fall in real terms over the coming year or so.

“An industry survey released earlier in the week showed employers expect to make pay settlements of 1.1% at present – well below many predictions for inflation, which the Bank of England forecasts will hit 2.7% next year.”

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