The UK's Office for National Statistics has published its latest employment and earnings report showing that Prime Minister Boris Johnson has a lot to be pleased about.
The UK employment rate jumped to a record 76.5 per cent, which showed that the number of people in work in the UK was 0.4 percentage points higher than the previous quarter, and 0.6 percentage points above the previous year.
The number of people unemployed was 0.1 percentage points lower than the third quarter and was 0.2 percentage points lower than a year earlier. Economic inactivity rate in the UK hit a record low at around 20.5 per cent, which was 0.4 percentage points lower than last year and 0.3 percentage points lower than the previous quarter. These figures show that the economy has had a bounce following the December election, as businesses feel there is now greater certainty about the trajectory of political and economic decisions. However, there are two important considerations in all of this. The first is that the country is still in the transition period in its relationship with the EU. And by the end of the transition period in December, the UK and the EU should have a long-term agreement in place - a very tight deadline to strike a deal. Failing to come to a long-term agreement could mean that the UK will again face the same economic anxieties experienced during the Brexit debates in Parliament before the election. This means that the uncertainty is not yet over, and the country could still end the transition period without a deal. The other consideration is that the employment figures do not give the complete picture, for instance, the information does not include people who have given up looking for work and people who regard themselves as self-employed. The ONS report also showed that in real terms annual growth in total pay was around 1.4 per cent, while annual growth in regular pay was about 1.8 per cent. However, some analysts feel that growth in earnings can only be sustainable if there is a commensurate increase in productivity.
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