Responding to the latest official labour market statistics, showing that the employment rate rose to a record high of 76.3% in November, Tej Parikh, chief economist at the Institute of Directors (
www.iod.com), said: “The UK labour market remains in fine shape, with a renewed surge in jobs growth providing uplift for the economy.
"Businesses have been eager to recruit over recent years, and higher employment levels have in turn supported household incomes.
"However, many positions remain unfilled, and as it becomes harder to find matches for particular roles, firms will increasingly look to close vacancies and tone down their hiring plans.
“The other side of the coin is pay. Wage growth has disappointed in recent months, but with inflation also weakening, consumers’ spending power should not be overly impacted.
"In particular, small businesses have been struggling to raise salaries to attract new staff, and they will be hoping for cost-cutting measures at the March Budget, alongside more investment in the UK’s ‘gummed-up’ skills system.”
The main points for the latest labour market statistics (September to November 2019) include: the UK employment rate was estimated at a record high of 76.3%, 0.6% higher than a year earlier and 0.5% up on the previous quarter; the UK unemployment rate was estimated at 3.8%, 0.2% lower than a year earlier but largely unchanged on the previous quarter; the estimated annual growth in average weekly earnings for employees in Great Britain remained unchanged at 3.2% for total pay (including bonuses) and slowed to 3.4% from 3.5% for regular pay (excluding bonuses); there were an estimated 805,000 vacancies in the UK for October to December 2019 (this is 11,000 fewer than the previous quarter and 49,000 fewer than a year earlier).