Gloomy as the outlook is formost of the British economy, the UK's labour market is healthy. Employment is up, unemployment is down and wage growth is still proceeding at a moderate pace.
Such benign conditions in the face of the credit squeeze and rising inflation surprised analysts, and will encourage the Bank of England in its stated aim of steadily reducing interest rates during 2008.
According to the Officefor National Statistics, thenumber of people in employment increased by 175,000 in the past three months of 2007, the strongest outcome for overa decade. At 29.3 million, theUK's workforce is at itslargest since records began in 1971.
The number of working pensioners continues to rise, up by 30,000 during the last quarter. Chris Ball, chief executive of the Age and Employment Network, said: "We estimate that perhaps double the present number working want, or need, paid work – not just to pay for life's "little luxuries" but for the basics of food, fuel and lighting. This is an absurd waste of fit and able people who have scarce skills."
There was a 13,000 drop in joblessness in the three months to November to leave unemployment standing at 1.65 million. Despite this tightness in the labour market, earnings growth was broadly stable, at 4 per cent including bonuses.
The impact of globalisation, with its attendant fear of jobs being exported east, of increasing numbers of older re-entrants to the workforce and of immigration from the new EU members combine to dampen pressure for higher pay, at least in the private sector.
The number of manufacturing jobs continued to fall; down by 33,000 in the quarter to November to 2.9 million compared with a year earlier, the lowest total since records began in 1978.Reuse content