Number of jobless falls... with wages set to rise

UNEMPLOYMENT has dropped again, while workers are also becoming more productive.

The number of people out of work fell by 59,000 to 1.42million in the three months to September 30 – which is 182,000 fewer jobless people than a year earlier.

The rate of unemployment held firm at a 42-year low of 4.3 per cent, a level it reached in the three months to July, according to the Office for National Statistics.

However employment also fell by 14,000 to 32.06million – a rate of 75 per cent. This means there was a rise in the number of people neither working nor looking for a job – such as those who are retired.

Meanwhile separate ONS data showed a pick-up in productivity, which measures the output per hour of each worker.

This is keenly watched because when it rises businesses create more wealth, wages are able to go up and the Government can receive more in taxes – so it will be a welcome relief for Chancellor Philip Hammond ahead of next week’s Budget.

Decades of steady productivity growth came to an abrupt end in the 2008 financial crisis and it has since been almost stagnant. But in the third quarter of this year, productivity unexpectedly jumped

‘Strength of the economy’

by 0.9 per cent. It follows a 0.1 per cent fall in the previous period and is the fastest rise in six years.

Wages also grew by 2.2 per cent to an average of £509 a week, although this improvement was still lower than the rate of inflation, meaning the squeeze on earnings continued. It is widely hoped inflation has now peaked at 3 per cent and will start to drop as the impact from the postBrexit fall in the pound fades away.

Employment minister Damian Hinds said: ‘The strength of the economy is driving an increase in full-time jobs and a nearrecord number are now in work thanks to the Government’s welfare reforms.’

A million people saw their living standards improve enough to break the ‘just about managing’ barrier, according to the Joseph Rowntree Foundation think-tank.

The number earning too little to lead a comfortable life dropped from 20million in 2014 to 19million two years later. But the poverty lobby group warned ‘it is unlikely the modest improvements noted are currently being sustained’ because of the benefit freeze and some benefit cuts, rising prices and falling incomes.