UK unemployment rate hits 11-year low

Employment in the UK rose by 49,000 in the three months to September 2016 and unemployment fell by 37,000 to 1.6 million, according to the latest labour market statistics.

The Office for National Statistics (ONS) said on Wednesday that the unemployment rate stood at 4.8%, down from 5.3% a year earlier and the lowest since July to September 2005.

The number of self-employed people increased by 213,000 to 4.79 million, representing 15.1% of all people in work.

ONS statistician David Freeman said: “Unemployment is at its lowest for more than 10 years and the employment rate remains at a record high. Nonetheless, there are signs that the labour market might be cooling, with employment growth slowing.”

The ONS report also revealed that the number of people claiming unemployment benefits in October increased by 9,800, the biggest rise since May.

Commenting on the report, Josh Hardie, deputy director-general of the CBI, said:

“While the labour market remains in decent health there are some concerning trends, such as the increasing claimant count.

“With the economy entering a more challenging phase, businesses are already changing processes to increase their productivity, and will be looking for measures to support their efforts in next week’s Autumn Statement, such as investment in innovation and infrastructure.”

Suren Thiru, head of economics at the British Chambers of Commerce (BCC), said that the slowing pace of job creation and the jump in the claimant count point to “a slight loss of momentum”.

“The slowing economy and continued uncertainty over Brexit, which is dampening firms’ recruitment intentions, is likely to put increased pressure on UK employment levels over the next year,” Thiru added.

“These subdued labour market and economic conditions are also expected to keep a lid on wage growth over the next year, despite higher than expected levels of inflation.

“The Chancellor must use next week’s Autumn Statement to support firms looking to recruit and invest in their workforce, including measures to boost investment and lower upfront business costs.”