UK employment holds steady at record level

The UK employment rate remains at a record high, official data showed on Tuesday, while wages continued to rise.

According to the Office for National Statistics, a total of 32.75m people of working age were in employment during the period from February to April, 357,000 more than a year earlier, as more people started working full-time. The number of part-time workers fell 45,000 year-on-year, to 8.6m.

The employment rate was 76.1% in February to April, unchanged on the three months to March and the joint-highest on record.

The unemployment rate was 3.8% for the three months to April, unchanged on the previous three months and the lowest since 1974. A total of 1.3m people were out of work, 112,000 fewer than a year earlier.

For men, the employment rate was 80.3%, marginally higher than the 80% recorded a year earlier, while the women’s rate of 72% was the highest since comparable records began in 1971. The ONS attributed the increase in the employment rate for women in part to changes to the state pension age for woman, which has seen fewer woman under 65 retire.

Matt Hughes, ONS deputy head of labour market statistics, said: "Overall the labour market continue to be strong, with employment still at a joint record rate. However, while the number of vacancies remains high, it has fallen back from the historic highs seen at the turn of the year."

Wages, meanwhile, continued to grow after a lengthy period of stagnation. Excluding bonuses, average weekly earnings rose 3.4%, or by 1.5% once adjusted by inflation. Including bonuses, wages rose by 3.1%, or 1.2% after being adjusted for inflation. That was below March’s growth of 3.3% but above the consensus forecast of 3.0%.

Year-on-year, average weekly wages excluding bonuses in April grew 3.8%, the highest since May 2008.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "The rise was driven by a huge 1.9% month-to-month increase in public sector wages, though private-sector wages also increased by an outsized 0.4%. In both cases, April’s 4.9% increase in the National Living Wage likely was a key in pushing wages higher.

"With the labour market unlikely to weaken suddenly soon, and government policies set to remain supportive of faster wage growth, the Monetary Policy Committee can’t afford to ignore the constant inflation pressure now emitted by the labour market."

Emma-Lou Montgomery, associate director for personal investing at Fidelity International, said: "Wages dodged the Brexit bullet again in April. That said, there have been some big changes in recent weeks, the obvious being the European elections and closer to home we are in the midst of a leadership race, the result of which will play a pivotal role in the final outcome of a Brexit deal.

"With inflation also starting to edge higher again, largely due to fuel prices, there is an air of anticipation that it could soon outstrip wages."

David Cheetham, chief market analyst at XTB, said the figures were better than expected. "The unemployment rate remains near a multi-decade low, and all-in-all, there’s very little here to suggest any weakness.

"The overall picture for the UK remains one that is far from thriving and looks to be simply treading water. But given the dual headwinds of political uncertainty and a slowing global economy, the current level of activity could be arguably be viewed as about as good as could be expected under these circumstances."

The pound rallied after the data helped shake off some of Monday’s gloom, when GDP, industrial and manufacturing production figures disappointed. As at 1030 BST, the pound was trading at 0.89 against the euro, and at 1.2712 against the dollar.