Jobs hit record high

The number of people in work is set to reach its highest level ever this week as the gravity-defying performance of the UK labour market continues despite the shrinking economy.

Experts predict employment rose to 29.7m in the three months to December – the highest level since records began in 1971 – even as the UK's economy shrank 0.3 per cent in the same period. A surge in part-time and self-employed workers, as well as firms attempting to hang on to skilled employees , have been attributed to this resilience, which has puzzled the Bank of England.

Unemployment is also expected to fall to an 18-month low of 2.48 million, but the collapse of a host of retailers such as HMV could mean worse news ahead.

Investec economist Victoria Cadman said: "While we do see the jobs market retaining its relative picture of health, we struggle to see the pace of improvement being maintained."