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JAN

UK job vacancies and numbers employed both hit record highs

Posted in: Blog

The pressure on employers to find skilled staff appeared to push up wages by more than expected in November as UK job vacancies reached a new peak.

City economists had expected the uncertainty surrounding the Brexit talks to limit wage rises, excluding bonuses, to 2.3%, the same rate as in October, but they increased to 2.4% in the three months to November. The figure rose to 2.5% when bonuses were included. Brexit helped push down living standards in 2017 – experts debate the data.

Vacancies hit the highest level since comparable records began in 2001, up 60,000 on a year earlier at 810,000. Further indications that the labour market remained in rude health could be found in figures for the total number of people in employment, which hit 32.2 million, the highest on record.

On Friday the ONS will publish its first estimate of GDP growth covering the last three months of 2017 and it is likely to show that the buoyant jobs market has helped the UK achieve at least 0.4% growth.

Some economists said the Bank of England could react to the expectation that wages growth would jump to between 3% and 4% in 2019 by increasing interest rates several times this year.

But pay growth continued to lag behind November’s inflation rate of 3.1%, indicating that Britain’s workforce still lacks the bargaining power to prevent living standards slipping.

 

Chris Williamson, chief business economist at IHS Markit, said the figures showed the UK labour market displayed signs of strength late last year, with employment rising and pay growth “creeping higher”.

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