The UK Government’s Office for National Statistics (ONS) published figures on Wednesday which show improvements in UK employment figures and the lowest number of benefits claimants in two years.
According to the ONS figures, employment increased by 24,000, while unemployment was down 5,000 from November 2012 to January 2013. There were 2.51 million unemployed people in the UK in the three months to April, down 88,000 from the same period a year ago. Inactivity rates for British people aged from 16 to 64 rose by 0.1 percentage points to 22.4% from November 2012 to January 2013, but were down by 0.5 from a year earlier. From November 2012 to January 2013 there were 8.99 million economically inactive people in the same age range of 16 to 64, which despite these numbers rising by 40,000, there was a decrease of 199,000 from the year before.
David Kern from the The British Chambers of Commerce (BCC), which represents local business, said: “This modest improvement in the labour market is very welcome, especially as it reverses the decline seen in the last couple of months. Despite the level of inactivity rising slightly, the UK labour market remains robust and is performing well by international standards. However pay, excluding bonuses, remains well below inflation at 0.9%, exacerbating the squeeze on real incomes.
According to the BBC, average earnings rose by 3.3% in April this year, in comparison to April 2012, primarily because bonuses to workers were paid out a month later this year by many companies. In spite of higher bonuses, the 1.3% jump in total earnings in the three months to April was still well below the rate of inflation, while consumer prices were up 2.4% in the year to April.
The Institute of Directors, in response to the latest unemployment figures, said its remains cautiously optimistic about the economic outlook in 2013 and believes GDP growth could be around 1.5% this year. Its chief economist Graeme Leach said: “Perhaps the clearest sign comes from the continued pressure on household incomes, with inflation running well ahead of earnings growth, which is just 1.3% (excluding bonuses). The real income squeeze remains a dragging anchor on GDP growth.”