Commenting on today’s labour market statistics, which showed the headline rate of unemployment was 5.5 per cent in the three months to July 2015, Michael Martins, Economic Analyst at the Institute of Directors said:
“Today’s figures are further proof that Britain’s businesses continue to power the recovery and are sharing the rewards with their employees. In the downturn, businesses did all they could to keep people in work, taking the difficult decision to cut hours or freeze pay. Now, real pay growth has become entrenched and the rate of unemployment has stabilised. The proportion of people in work is now back to its joint highest level on record, suggesting the UK economy is close to full employment.
“As firms ramp up production, and real wage growth boosts consumer confidence, job security is also on the up. The number of part-time and temporary workers who would like a full-time position is at its lowest since before the crisis and the number of long-term unemployed has fallen dramatically in the past twelve months. Even though short-term unemployment appears to be growing slightly, this could be a result of more people starting to hunt for jobs in response to a high number of vacancies.
“It is also encouraging to see that productivity could finally be increasing. Employees are doing more with less – working fewer hours, producing more and being paid more. These are all signs that although the headline unemployment rate may have plateaued, the labour market is still tightening. People will have to look hard to find a negative story in today’s figures, which provide yet more evidence that the UK economy is strong and stable enough to begin the gradual and incremental process of normalising interest rates after the US Federal Reserve.”