UK employment hits new record high as Bank weighs rate cut

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The employment rate in the UK hit a new record high at the end of last year despite the political turmoil over Brexit, official figures show.

The official employment rate came in at 76.3% of the workforce and the unemployment rate was unchanged at 3.8% between September and November.

The statistics from the Office for National Statistics (ONS) are closely watched as a sign of the underlying strength of the UK economy.

Britain has seen a jobs boom in recent years, taking some economists by surprise as economic growth has been sluggish and Brexit uncertainty has rattled firms.

Last month’s figures had shown employment between August and October reach 76.2%, a previous record high.

“Economic growth is currently as glacial as the winter weather, but the UK’s job creation engines are still running hot,” said Pawel Adrjan, UK economist at the jobs site Indeed.

It comes in spite of warnings by two leading recruitment firms last week that heightened political uncertainty around the election and Brexit have dented employer hiring.

PageGroup (PAGE.L) highlighted falling client confidence as it confirmed it had slashed staff, while shares in rival Hays (HAS.L) crashed as it issued a profit warning.

The figures also come in spite of a string of weak official data, which had fuelled expectations that the Bank of England could slash interest rates later this month in a bid to revive growth.

GDP data last week showed UK firms’ output going into reverse, with the overall economy unexpectedly shrinking by 0.3% in November.

It marked only a 0.6% rise in output on the same month one year earlier, the slowest annual increase since 2012 as Brexit uncertainty eroded growth.

Further signs of a sluggish economy came in official inflation figures also published last week. The separate ONS data showed price growth slowing to a three-year low of 1.3% in December.

The low inflation rate increased pressure on the central bank to intervene, as it has a mandate to target an inflation rate of 2%. The pound fell when the numbers were released.

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