Private firms hiring at record pace

Private firms are swelling their staff at a record pace with manufacturers, builders and services firms on course to add 150,000 jobs in the first three months of this year, according to financial data firm Markit.

The fastest rate of employment in the 16-year history of Markit’s purchasing manager surveys leaves unemployment virtually certain to breach the Bank of England’s 7 per cent threshold for considering interest rate hikes imminently. Official unemployment stands at 7.2 per cent.

While services — accounting for three-quarters of output — remains the key driver of the economy, the fastest rate of jobs growth is coming among construction firms as Help to Buy lifts housebuilding.

Despite a slight slowdown in services activity in February registered by the Chartered Institute of Purchasing & Supply’s latest activity index — put down to weather-related disruption — work backlogs and confidence are both growing.

The surveys suggest the wider economy is on course for 0.7 per cent growth in the current quarter, on a par with the final three months of 2013. The UK is “easily” on course for its best year since 2007 in 2014, chief economist Chris Williamson said.

Capital Economics economist Samuel Tombs said: “With business and consumer confidence strengthening, credit constraints loosening and the squeeze on real pay easing, the UK economy should experience another year of robust growth in 2014.”