Recovery in jobs gives a fillip before the news on growth

Number in work hits a record high but there are warnings of 'shaky foundations'

A stunning jobs recovery has pushed UK employment to a record high of almost 30 million, giving Chancellor George Osborne a timely boost ahead of potentially dire news on growth.

In the three months to November there were 29.68 million people in work, a 90,000 rise on the previous quarter, according to the Office for National Statistics.

It was also more than half a million higher than a year earlier and took the employment rate to 71.4 per cent, the highest since official records began in 1971. The more timely measure of jobseeker's allowance claimants also showed a surprise 12,100 fall in December, far better than the City feared.

Unemployment dipped 37,000 to fall below 2.5 million for the first time in almost two years. The figures come despite poorer news on jobs with the collapse of retailers such as HMV, Jessops, Blockbuster and Comet potentially putting more than 10,000 jobs at risk.

They also deepen the productivity puzzle confounding the Bank of England and economists alike with the ONS set to unveil a 0.1 per cent decline for the overall economy between October and December, marking the fourth quarter of economic contraction in the past five and raising the threat of an unprecedented triple-dip recession.

The IMF sounded a note of caution as it trimmed its UK growth forecasts by 0.1 per cent to 1 per cent this year. It expects the economy to grow 1.9 per cent in 2014, 0.3 percentage points down on its October forecast. The jobs figures showed a 23,000 fall in part-time employment, more than offset by a huge 113,000 increase in the numbers employed full time in the quarter months to November. A modest rise in youth unemployment to 957,000 and a rise in long-term unemployment were the only blots on the figures.

Employment Minister Mark Hoban said unemployment was lower than when the Coalition took office, although shadow work and pensions secretary Liam Byrne said the jobs recovery was built on "shaky foundations".

He added: "There are now more people on the dole long term than at any time since October 1997, there are more signing on for over two years than at any time since the '90s and there are now more people in temporary jobs than at any time since July 2001."

Millions of workers are also worse off in real terms as wages grow by 1.5 per cent, well below the 2.7 per cent inflation rate, the figures showed. Neil Carberry, CBI director for employment and skills, said: "Pay restraint has played an important role in preserving jobs and, with growth in average weekly earnings remaining subdued, it's clear that this is a trend that continues."

HSBC economist John Zhu warned: "But if demand remains weak, firms could finally collapse or shed labour. The resilience of the labour market could evaporate."

The Bank of England ruled out an imminent return to the printing presses in the minutes of its latest policy meeting.

The monetary policy committee, which has pumped £375bn into a floundering recovery since March 2009, highlighted positives such as the aversion of the fiscal cliff in the United States and the stabilisation of the eurozone, which "strengthened the belief of some of these members that no further asset purchases were required at the current juncture".

The MPC was also encouraged as the Funding for Lending scheme gained traction in improving credit conditions.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250 ...

Reach Volunteering: Trustees with Finance, Fundraising and IT skills

Voluntary and unpaid, reasonable expenses reimbursable: Reach Volunteering: St...

Day In a Page

Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones
Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

Why are we addicted to theme parks?

Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement
Tourism in Iran: The country will soon be opening up again after years of isolation

Iran is opening up again to tourists

After years of isolation, Iran is reopening its embassies abroad. Soon, there'll be the chance for the adventurous to holiday there
10 best PS4 games

10 best PS4 games

Can’t wait for the new round of blockbusters due out this autumn? We played through last year’s offering
Transfer window: Ten things we learnt

Ten things we learnt from the transfer window

Record-breaking spending shows FFP restraint no longer applies
Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent