Unemployment at 11-year low in run up to Brexit vote

17 Aug 16

The unemployment rate in the UK in the second quarter of 2016 was the lowest in more than a decade, according to figures from the Office for National Statistics released today.

The proportion of those out of work in the three months to the end of June was 4.9% according to the ONS. It has not been lower since July to September 2005.

This is the final release to come before the full impact of the UK’s vote to leave the European Union on June 23 on the labour market is known, with only seven days following the vote covered in the June figures.

The number of unemployed people – those able to work and seeking employment – fell by 52,000 compared with the previous quarter, and now stands at 1.64 million. This is 207,000 lower than a year earlier, and the lowest figure since March to May 2008.

Over the three-month period, there were 31.75 million people in work. This represents an increase of 172,000 compared with January to March, and an increase of 606,000 year-on-year. The proportion of people in work over the quarter was 74.5%, the highest since comparable records began in 1971.

The proportion of people aged from 16-64 who are in work, known as the employment rate, between April and June was 74.5%, the highest since comparable records began in 1971.

Employment minister Damian Hinds, said the figures the country was in a position of strength.
“The job now is to build on this success story so that everybody can benefit from the opportunities that are being created regardless of who they are or where they come from,” he added.

However, the Centre for Economics and Business Research warned that this could be the last batch of low unemployment statistics seen for some time, as the economy battles to recover from the shock of the vote to leave the EU. It expects unemployment to rise in the rest of 2016 and 2017 as a result.

Senior economist Nina Skero said that while the headline unemployment figure was strong, future figures would reflect a flurry of weak post-Brexit economic data.

“Part of the reason that we expect the rise in unemployment to be only minor (from 5.2% over 2016 to 5.6% in 2017) is that wage growth remains subdued,” she stated. “In light of this, companies facing hardship may choose to limit costs by holding wages steady rather than cutting staff. This is in line with the approach that some UK based companies took when dealing with the aftermath of the global financial crisis. There is already some evidence of this happening as the number of people claiming jobseeker’s allowance fell in July.”

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