Unemployment carried on falling in the run-up to Britain’s vote to leave the European Union, official figures have revealed.
Office for National Statistics (ONS) figures have shown the employment rate reached a record high of 74.5{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34}, with 31.8 million people in work in the three months to June – 172,000 more than the previous quarter.
A total of 1.64 million people were unemployed – a fall of 52,000 over the quarter and 207,000 down in contrast to those a year ago, giving a jobless rate of 4.9{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34}.
The ONS figures also revealed the number of people claiming unemployment related benefits fell 8,600 to 763,600 in July – the month following the referendum.
Meanwhile regular pay growth, excluding bonuses, was 2.3{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} – a slight improvement on the previous month’s figures.
The jobless total is at its lowest level for eight years, while the unemployment rate is at its lowest since the summer of 2005.
The ONS pointed out that little of the data covered the post-referendum period from 23 June.
ONS statistician David Freeman reported: “The labour market continued on a strong trend in the second quarter of 2016, with a new record employment rate.”
“However, little of today’s data cover the period since the result of the EU referendum became known,” he added.
Some economists said the figures revealed the UK had fears about the impact of Brexit jitters but there were also warnings that the bright performance might not continue given the gloomy picture given by recent business surveys.
The results provide a “glimmer of hope”, according to the head of European fixed income strategy at Scotiabank, Alan Clarke.
He said: “Ahead of the referendum, speculation was that the economy would grind to a halt, hiring would stall and investment plans would be put on ice.”
“This does provide a glimmer of hope that if fears of the pre-Brexit jitters proved unfounded, maybe the post referendum doom and gloom may equally prove to have been overcooked,” he added.
However analysts at ING bank suggest that while the UK labour market data for the three months to June look good, it probably won’t last, “given the deterioration in business surveys following the Brexit vote.”
“Businesses continued to expand in the build-up to the EU referendum, but our concern is that the surprise outcome of the vote will lead businesses to pull back in coming quarters,” said senior economist James Knightley.
“Business surveys have indicated that activity has weakened, while others suggest that investment and hiring intentions have been significantly scaled back,” he added.
“Consequently, we expect the pace of job creation to weaken through the year, with it probably turning negative as we move into 2017.
“Brexit uncertainty is not going to fade anytime soon so we unfortunately expect the unemployment rate to rise steadily through 2017,” he warned.
Source: Sky news