UK employment maintains record high as pay growth continues to rebound
The UK's employment rate remained at 74.1 per cent between November and January, the joint-highest since records began in 1971.
The headline unemployment rate maintained its 10-year low of 5.1 per cent, the data released this morning by the Office for National Statistics (ONS) shows. There are now 171,000 fewer people unemployed than in the same period last year.
Annual pay growth, as measured by average weekly earnings, was 2.2 per cent between November and January. It is faster pay growth than in the three months to December and marks a continued revival in pay growth after it came off the boil toward the end of last year.
“Once again the latest quarterly figures show continuing high employment levels but no significant pick-up in earnings growth,” said ONS statistician Nick Palmer.
"It seems that the soft patch for wages late last year was a blip and the recent run of better data is the new norm. Maybe it is an early feeding in of the National Living Wage," said economist Alan Clarke from Scotiabank.
"The flipside is that the unemployment rate didn't fall. OK, that was the consensus, but I'm still a bit disappointed. It wouldn’t have taken a lot to push the rate down again."
"The rate is still below the low-point from before the 2008-09 recession, so it’s a good level."
The slowdown in pay growth spooked several members of the Bank of England's monetary policy committee (MPC). Many said they would need to see a rebound in pay before voting to increase interest rates from record lows.
David Kern, chief economist at the British Chambers of Commerce, said:
Yet another set of positive employment figures confirms that Britain’s labour market remains a source of strength for our economy. However, if this cannot be translated into faster economic growth, higher employment will not be matched by gains in productivity.
Growth in labour costs remains subdued despite rising earnings. This will enable the MPC to postpone any plans for raising interest rates or tightening policy.