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Unemployment reaches 10-year low

January 28, 2016  /   No Comments

Nick Elvin

Unemployment in the UK has reached its lowest level since early 2006, while long-term unemployment has reached a six-year low, according to the latest Office for National Statistics (ONS) labour market figures.

The figures show that for the three months to November 2015, the number of people out of work fell by 99,000 to 1.68 million, with the jobless rate falling to 5.1%. Long-term unemployment fell by 25% over the year to 488,000. The UK also recorded its highest-ever employment rate of 74% with 31.4 million people in work, which the ONS says has been driven by a rise in full-time jobs.

Meanwhile, wages continued to grow, up 2% over the last year, and the number of vacancies reached more than 750,000.

Commenting on the figures, Matthew Fell, the CBI’s chief of staff, said: “The labour market continues to be a bright spot for the UK economy, reflecting strong domestic demand and the importance of maintaining flexibility. However, global risks are ramping up, so there’s no room for complacency.

“While employment has continued to rise strongly, with the largest increase for almost 18 months, private sector pay growth has continued to slow, underlining the need for a sustained recovery in productivity.”

However, according to the Open University, the continued increase in the vacancy rate is particularly acute in specialist areas such as IT and engineering, and hard to fill vacancies can cause delays in developing new products and services.

Steve Hill, the OU’s director of external engagement, said: “The skills gap is affecting everyone, holding back businesses and having a knock-on effect on British economic productivity.

“In most cases, the answer to this shortage is right under our noses – with up to 90% of the current workforce still in work over the next decade. With the right training and up-skilling, these individuals can become the engineers, data scientists and high-skilled digital workforce the UK needs to compete on the world stage.”

The labour market figures also show that the number of women in work is up by over a million since 2010 to new record high of 14.66 million, while the proportion of young people who have left full-time education and are out of work has fallen to a record low of 14.1%. The employment rate for young people who have left full-time education continues to rise – up to 74.6%, which remains the highest in over a decade.

In addition, the number of self-employed people has risen by 98,000 in the three months leading up to November, compared to the same period in 2014.

Lorence Nye, economic policy adviser for IPSE, the Association of Independent Professionals and the Self Employed, said: “Today’s labour market figures again show more and more people are realising the benefits of self-employment and opting to become their own boss.

“The self-employed are now a key part of the UK economy. Their flexibility provides us with a unique characteristic that has powered the UK through the financial crisis and may be the one thing that shelters the country from the potential global economic storm appearing on the horizon.”

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