UK unemployment down, wage growth up

UK unemployment has continued to fall, according to new figures from the Office for National Statistics (ONS).

The ONS said on Wednesday that unemployment fell by 52,000 to 1.6 million in the three months to November, compared to the previous three-month period.

Year-on-year, the number of people out of work fell by 81,000. There were 31.8 million people in work, the ONS said.

The unemployment rate for September to November 2016 was 4.8%, down from 5.1% a year earlier. It has not been lower since July to September 2005.

Meanwhile, average weekly earnings excluding bonuses increased by 2.7%. In real terms (adjusted for consumer price inflation) pay increased by 1.7%.

Commenting on the figures, Suren Thiru, head of economics at the British Chambers of Commerce, said:

“Overall, with employment levels still close to record levels and unemployment continuing to fall, the latest indicators confirm that the UK jobs market remains a major bright spot for the UK economy.

“While labour market conditions could soften over the next year as economic growth slows, the high degree of flexibility in the jobs market will help limit the extent of any uptick in unemployment.”

However, Thiru also highlighted the possibility of household finances coming under increased pressure.

“Although there was a welcome pick-up in average earnings growth, the gap between wage and price growth is narrowing,” he said. “If this continues as we expect, real household incomes will be squeezed further, stifling consumer spending, which is a key driver of UK economic growth.”

Thiru stressed that the action was needed to safeguard the UK jobs market in the long term, for example by supporting firms looking to recruit and invest in their workforce, and ensuring companies have access to the workers they need.