‘Continued moderate growth in employment has led to a new high in the total employment rate, while the rate for women has reached 70pc for the first time on record. Overall, the labour market appears to be edging towards full capacity.’ – David Freeman, ONS
The number of Britons filing for unemployment benefits dropped markedly last month, while wage growth slowed in the Q4. The Office for National Statistics reported on Wednesday the number of claimants declined 42,400 to 787,400 in January, following the preceding month’s upwardly revised fall of 20,500. In the meantime, including bonuses, average hourly earnings climbed 2.6% on an annual basis in the Q4 of 2016, while analysts expected an unhanged reading from the prior month, when the Average Earnings Index rose 2.8%. Excluding bonuses, earnings advanced 2.6%, falling behind analysts’ expectations for a 2.7% climb. Wage growth is closely followed by the Bank of England in the wake of the Brexit vote, as an acceleration in pay growth amid higher inflation could force the Bank to raise interest rates. Inflation rose 1.6% in the 12 months to December 2016. Nevertheless, analysts say they do not expect wage growth to pick up in the upcoming months. Wednesday’s data also showed the unemployment rate held steady at its 11-year low of 4.8% during the final quarter of 2016, in line with economists’ forecasts. The data suggests that the labour market was not affected by the June 23 referendum; however, the 2017-year outlook remains ambiguous. The number of foreign workers in Britain declined 9,000 on a quarterly basis in the Q4.