News Column

Record surge in hiring as British growth takes off

June 12, 2014

TIM WALLACE



JOBS were created at a record pace in the three months to April, sending unemployment tumbling again, official figures showed yesterday. An interest rate hike is increasingly likely after long term joblessness dived and full-time jobs overtook part-time work as the main driver of growth.


But a few signs of sluggishness remain. Wage growth, for example, fell back below the pace of price rises.


Employment jumped by 345,000 in the three-month period to 30.54m, while unemployment plunged 161,000 to 2.17m. The split was exactly even by gender, bringing the male unemployment rate down to 6.9 per cent and the female rate to 6.1 per cent.


Youth unemployment dropped 15,000 to 853,000.


Full-time jobs shot up 263,000, while an extra 81,000 found part-time work - and the number working part time because they could not find full-time work fell 39,000 to 1.4m.


Long-term unemployment also fell sharply, with the number out of work for more than 12 months down from 37,000 to 791,000.


The drop in unemployment continued despite cuts to public sector jobs, which fell 103,000 in the first quarter to 5.4m, the lowest level since comparable records began in 1999.


As a result, economists believe the Bank of England could bring its expected interest rate rise forward to early 2015 or even late this year.


However, falling real wages could limit the move to a rate hike.


Average incomes rose just 0.7 per cent in the three months to April, while prices rose by 1.8 per cent.


Even excluding the distorted bonus figures thanks to tax changes, incomes rose by 0.9 per cent - well below prices.


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Source: City A.M. (UK)


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