Jobs market boom sustained by Midlands and the North
The UK economy is creating jobs at its fastest pace in almost four years, according to a new survey, with the strongest growth seen in the Midlands and the North.
The latest report by the accountants KPMG and the Recruitment and Employment Confederation shows the number of people taking on permanent positions last month rose at its quickest rate since March 2010.
The steepest increase was registered in the Midlands and the North. Those regions were also responsible for the fastest recorded rise in temporary posts since 1998.
The strong readings suggest that the economy is continuing to create jobs at an impressive pace as the recovery continues. The Office for National Statistics said last month that employment rose by 250,000 in the three months to October, while the unemployment rate dropped sharply to 7.4 per cent. Now the latest KPMG/REC report suggests that the jobs market has continued to accelerate since then.
The Bank of England has said it will consider raising interest rates when the unemployment rate falls to 7 per cent. An increasing number of City analysts expect that threshold to be reached later this year, although senior policymakers in Threadneedle Street, including the Governor Mark Carney, have hinted that they might still keep rates on hold or revise down the target.
"Combine the latest job figures with news that business confidence has reached a new high and it's easy to share the renewed sense of optimism amongst employers," said Bernard Brown of KPMG. "Little wonder there is speculation suggesting Mark Carney might revise the unemployment benchmark at which an interest rate rise will be considered".
The brighter jobs picture for regions north of London was supported by the specialist recruitment consulting firm Robert Walters yesterday, which reported that one of the best-performing parts of its domestic business in the fourth quarter of 2013 was Manchester.
Other indicators are pointing to renewed business activity. The Bank of England's latest Credit Conditions Survey, released yesterday, said that banks made a significant amount of credit available to firms in the fourth quarter, and that lenders expect to make a similar amount available in the first quarter of this year. Though demand for borrowing was broadly flat, banks said they expected firms to borrow more this year, including small businesses.
The Treasury will argue today that its moves to reduce employers' National Insurance contributions (NICs) will save firms nearly £5.5bn a year. In last month's Autumn Statement the Chancellor George Osborne announced NICs for firms employing people under 21 earning up to £813 a week would be abolished from April 2015.
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