Yael Selfin, Chief Economist at KPMG in the UK, comments on today’s labour market figures:
“Rising employment, coupled with a significant fall in people who are economically inactive, confirm the picture of a very tight UK labour market. A record high number of vacancies and the joint highest employment rate since records began in 1971 are likely to increase the prospects of the Bank of England raising rates this year.
“The tight labour market will require more innovative approaches to meet demand. Pockets of higher unemployment among younger workers may need to be addressed more holistically, looking at where some apprenticeships and other training schemes currently fail.
“Mixed regional performance saw a fall in employment in London, West Midlands, Scotland and Yorkshire and Humber while the strongest rises were in East Midlands and the East. Wales saw a relatively high rise in unemployment thanks to the shift of inactive workers back into the labour market.
“Despite the slight uptick in earnings in the final quarter of last year, after taking into account inflation real earnings were still on the decline. The continued squeeze on households’ income is likely to manifest itself in weaker spending and insipid UK economic growth this year, against a backdrop of more rousing growth elsewhere.”
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