United Kingdom: Unemployment rate declines in September-November period, employment rate at record high
January 22, 2019
In the September-November period the unemployment rate fell to 4.0%, the joint-lowest rate in over 40 years. Employment rose by 141,000 compared to June-August, on the back of a surge in full-time positions, and the employment rate was the highest since comparable records began in 1971. The figures show that intensifying Brexit uncertainty has yet to overly affect firms’ hiring intentions—although that could change in the early part of 2019, as the country moves closer to exiting the EU without a deal.
The tight labor market continued to feed through to wage pressures, with nominal earnings growth excluding bonuses remaining at a multi-year high of 3.3%, markedly outpacing the rate of inflation.
Looking ahead, wages should continue to be supported by the limited slack in the labor market and more generous public-sector pay agreements. Regarding employment, Brexit uncertainty could begin to dampen momentum as firms delay hiring decisions until greater clarity emerges over the outcome of the process.
UK Unemployment Rate Forecast
Our panelists currently see the unemployment rate averaging 4.2% in 2019 and 4.3% in 2020, while real disposable income is seen increasing 1.4% in both 2019 and 2020.
Author: Oliver Reynolds, Economist