Yael Selfin, Chief Economist at KPMG in the UK, comments on today’s labour market data release
Yael Selfin, Chief Economist at KPMG in the UK, comments on today’s labour market data release:
“Today’s Q1 figures for the UK labour market show little signs that businesses are retrenching, with employment continuing to rise and the employment rate reaching 75.6%, the highest since comparable records began in 1971.
“The decline in regional unemployment was also broad-based, falling in 10 out of the 12 regions, rising only in the South East and in the North West, while in the South East, the increase was from a very low rate of 3.4%. The lowest rate of unemployment across regions was recorded in Northern Ireland at 3.1%. At the same time, Northern Ireland,Wales and the North West recorded the highest rates of inactivity – 28% and 23% for the latter. These were also the regions with the lowest rates of employment at 69.7, 73.4 and 73.6 respectively.
“Disappointing preliminary productivity numbers, with a fall of 0.5% in productivity level as the increase in hours worked of 0.6% led to only 0.1% increase in output, may be revised upwards slightly later this month, but are unlikely to match the strong productivity growth in Q3 and Q4 of 2017.
“Despite the weaker economic background, regular pay continued to rise in the first quarter of the year, approaching the ceiling the UK’s weaker productivity could accommodate, and with no signs of cooling from the labour market, another rise in interest rates could be on the cards in the coming months. ”
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