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UK Unemployment Rate Drops To A Record low

UK Unemployment Rate Drops To A Record low

13 Jul 14:00 by Andrew Little (FIRP)

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Figures from the Office for National Statistics reveal UK unemployment fell by 64,000 to 1.49m in the quarter to May, with the unemployment rate falling by 0.2% to 4.5%, the lowest rate since records began in 1975.

Meanwhile, the UK’s employment rate rose by 0.3% on the quarter to a record high of 74.9%.

Commenting on the figures, careers site totaljobs’ HR director David Clift said the latest fall in the unemployment rate shows just how strong the UK job market is at the moment: “The figures are particularly impressive given that the ONS data covers March-May, a time when General Election campaigning and the sense of instability it caused was nearing its peak.

“These figures also build on last month’s, where the UK’s unemployment rate was at its lowest in over 40 years. Looking forward, the labour market figures may not remain quite as positive, as we begin to see post-election uncertainty hit the job market. But with a government now in place with a greater focus on the labour market, perhaps this uncertainty can be nipped in the bud.”

Meanwhile, Lee Biggins, founder and managing director of CV-Library, said: “It’s positive to see that the unemployment rate is continuing to drop, and it’s clear that businesses across the UK are working hard to strengthen their workforce and keep more people in work. In fact, our own job market data for the second quarter of 2017 has found that advertised job vacancies were up by 1.6% on the first quarter of the year, and 14.9% when comparing data from the same period last year.”

Also commenting, Mariano Mamertino, EMEA economist at the global job site Indeed, said: “Britain’s steadily improving employment picture is starting to look more anomaly than achievement. With 32m people in work and the employment rate at its highest level since records began, the progress made since the recession is nothing short of remarkable.

“But the UK’s seemingly boundless capacity to create new jobs can only defy economic gravity for so long. In recent months the employment data has begun to slip out of sync with the wider economy. GDP grew by just 0.2% in the first quarter, and with both business confidence and consumer spending waning, future job growth may increasingly need to come from workers entering self-employment.

“In some ways the labour market has become a victim of its own success. Separate ONS data reveals the number of unemployed people per job opening has declined to its lowest level in 15 years – meaning employers frequently have to fight harder to recruit the people they need.

“While the disconnect between the rosy employment figures and the darkening economic picture is little cause for concern, the gulf between wage growth and price inflation cannot be ignored. With consumer prices rising at 2.9% a year and real wages – including bonuses – shrinking by 0.7%, the wage squeeze being endured by millions of Britons has turned into a clear and present danger for the economy.”

In commenting on the figures, the Recruitment & Employment Confederation director of policy Tom Hadley said: “With the unemployment rate at its lowest since 1975, there is no relief for employers struggling to fill vacancies. We rely on people from abroad and need an immigration system based on this reality. At the same time, employers are reaching out to encourage applicants from underrepresented groups and are reviewing hiring practices. The Matthew Taylor report, published yesterday, encourages businesses to drive good employment practices, which is increasingly important as a way of attracting and retaining staff.