Highest number of employed since records began

In an upbeat report from the Office for National Statistics (ONS) in late December, it was stated that unemployment fell by 82,000 to 2.51 million in the period between August and October bringing the national rate down to 7.8%, a 0.2% drop from the previous quarter, which is the largest quarterly fall since 2001.

Employment also rose by 40,000 to show 29.6 million in work. This is the highest number of people in employment since records began. The private sector recorded an increase of 65,000 workers to 23.8 million. However, the public sector continued its decline, losing 24,000 workers to 5.7 million.

The minister for work and pensions, Mark Hoban, commenting on these figures was quoted as saying: “We see more people looking for work and actually finding work, so I think there’s a really strong labour market there.

“I think there’s more flexibility in the labour market, although this month we’ve seen a big increase in full-time jobs and no movement at all in the number of part-time jobs.”

On the down side total pay was only up 1.8% compared to the same period last year and therefore still below the rate of inflation. This lack of wage growth is likely to dampen consumer demand.

Meanwhile, the Office for Budget Responsibility, who are responsible for the veracity of economic forecasts on behalf of the economy, cut their forecast of the future peak of unemployment to 8.2%, which is considerably higher than the
7.8% reported by the ONS.

On behalf of the opposition, Liam Byrne, the shadow work and pensions minister stated: “Pay packets are under intense pressure as the pace of jobs growth slows down – wages are now growing at only half the rate of prices.

“Families are under real pressure right now and what today’s figures show is that the Department for Work and Pensions’ big back-to-work programmes are frankly delivering nothing.”

This is part of our monthly economic review is intended to provide background to recent developments in investment markets as well as to give an indication of how some key issues could impact in the future. It is not intended that individual investment decisions should be taken based on this information; we are always ready to discuss your individual requirements.