By Marcus Leach
Commenting on the labour market statistics published by the Office for National Statistics, David Kern, Chief Economist at the British Chambers of Commerce, (BCC), was pleased with the drop in unemployment.
“These figures are positive overall, with a rise in employment and a fall in unemployment in the last three months. There was also an encouraging decline in unemployment among young people. However, there are some causes for concern. The number of economically inactive people rose by 32,000, and those working part-time because they could not find a full-time job rose to a record high.
“The private sector is willing and able to create jobs, but we must not be complacent. It is likely we will see more public sector job cuts in the coming months, and we are expecting unemployment to increase by 150,000 to a peak of 2.6m over the next 12 to 15 months.
“Given this background, the government must empower the private sector to create jobs by reducing the burden of regulation, particularly on smaller firms. Although the new figures show a marginal increase in earnings growth, wage pressures remain muted and are still well below inflation. Following yesterday’s surprising fall in inflation, this should encourage the MPC to delay interest rate increases until the recovery is more secure. The priority must be to support the recovery and avoid a setback while the government implements measures to reduce the deficit.”
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