Tight labour market breaks new ground on jobs 

Published on Jobs, Skills and Pay

Britain’s labour market tightened further to deliver a record high on employment and a record low on economic inactivity, the Resolution Foundation said today in response to the latest ONS figures.

Employment hit a new record high of 75.8 per cent in the three months to November, while economic inactivity hit a joint record low of 21 per cent – driven by a big fall in the number of students not in the labour force and ongoing falls in inactivity due to long term sickness.

Real pay growth increased to 1.1 per cent. With inflation set to fall further in early 2019, Britain’s pay recovery should continue to strengthen this year.

Stephen Clarke, Senior Economic Analyst at the Resolution Foundation, said:

“Britain continues to break new ground on jobs, from employment hitting a record high to economic inactivity falling to a new low.

“A tight labour market, coupled with falling inflation, should deliver stronger pay growth in early 2019, although returning to pre-crisis increases remains a distant prospect.”

Notes to Editors

Real pay growth was 1.4 per cent in June 2016, a rate that has not been reached since, largely due to the inflation spike resulting from the post-referendum sterling devaluation. In the decade running up to the crisis, it averaged 2.5 per cent.