The latest employment figures suggest the UK jobs market remained resilient in the run-up to the October Brexit deadline, confounding the expectations of economists.
The Office for National Statistics (ONS) reported that the number of people in employment had reached a new record high, as 29, (more people in work took the total to (****************************************. 8 million in the three months.
The jobless rate fell to 3.8% – matching its lowest level since January 1975.
Vacancies and pay growth fell back, though wage rises continued to easily outstrip the rate of inflation – last measured at 1.5%.
The ONS noted that wage growth eased from a rate of 3.7 % to 3.2%, but it largely blamed the decline on high bonus payments being booked in October 2020 compared with October 2020
When the effects of bonuses were stripped out, pay was up at a 3.5% rate from 3.6% recorded the previous month.
Economists had expected the data to show that hiring had fallen because it included the month of October and the run-up to the deadline for a withdrawal agreement with the EU – secured by Boris Johnson before he called the election.
Previous employment reports had shown evidence of weakness emerging in the jobs market while separate ONS data, released earlier this month, had reported the economy growing at its slowest annual pace for seven years.
David Freeman, head of labor market and households at the ONS, said: “While the estimate of the employment rate nudged up in the most recent quarter, the longer-term picture has seen it broadly flat over the last few quarters.
“Pay is still increasing in real terms, but its growth rate has slowed in the last few months.”
The upbeat job figures did little to boost the pound as it headed back towards its pre-election result level versus the dollar, withinvestors reacting to the PM’s decisionto prevent MPs extending the Brexit transition period beyond (*******************************.
The data was released two days before the Bank of England’s monetary policy committe e (MPC) meets to discuss interest rates.
Two members of the MPC had previously cited weaker employment data for voting in support of a cut in borrowing costs last month.
But in his analysis of the ONS figures Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “Demand for labor remains strong enough to stop the MPC from cutting Bank Rate over the coming months.”
He added: “We know from business surveys that firms have held back from hiring due to near-term Brexit and political risk.
” Job postings should rebound in early (*****************************, as corporate confidence recovers. “
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