By Daniel Hunter

Employment rates remain well below their pre-recession levels in many parts of the UK despite increasing economic confidence, new Resolution Foundation analysis has found.

Figures from the independent think-tank show that only in London has the share of the adult population which is employed returned to close to the levels seen in early 2008 — before the main impact of the recession. In other parts of the country, the South East, the South West, Scotland and the East Midlands, the employment rate has fallen by more than 2.5 per cent since 2008.

Nationally, the result is a job gap of 963,000 — representing the number of jobs which would need to be created to make up the ground lost over the years of recession. While the number of people in work has seen a welcome rise over recent months, this good news is tempered by the fact that the country’s adult population has risen at the same time (by 1.8 million) so that the proportion of people in work has fallen.

New labour market statistics to be released on Wednesday (Aug 14) could show the size of the national jobs gap widen to close to 1 million if the trend over recent months, which has seen it rise from 850,000 in March to 963,000 in July, continues.

Meanwhile, the Resolution Foundation’s area-by-area analysis shows the diverging fortunes of different countries and regions within the UK.

The hardest-hit area has been the South East (excluding London) where 61 per cent of the adults population is now employed — down from 64 per cent in early 2008. This is closely followed by the South West - which has seen a 2.7 per cent fall to 59 per cent, and Scotland and the East Midlands where the employment rate has fallen 2.6 per cent — to 59 per cent and 58 per cent respectively.

The lowest overall rate of employment is in the North East, where less than 54 per cent of the working-age population is employed — down two per cent since 2008.

The strongest performer has been London, which is closest to closing its job gap with an employment rate less than one per cent down from its 2008 level of 62 per cent. The next best performance is in the North West and the region of Yorkshire and Humber where the gap is only just above one per cent.

“Economic confidence seems to be on the rise in the UK and this is partly down to a welcome increase in the overall numbers of people in work," Alex Hurrell, senior analyst at the Resolution Foundation, said.

"However this hasn’t matched the rate of the increase in the adult population and the result has been that employment, measured as a proportion of people aged 16 and over, has fallen everywhere — a less positive view of labour market conditions.

“There may be particular factors at work in nations or regions which help explain their individual performance — but one clear trend is that London is outperforming the rest of the country in employment and this is especially noticeable when you compare it to the rest of the South East.

“Unfortunately these figures show that the jobs recovery continues to be very difficult in every other part of the UK and that there is a long way to go before the hole knocked in employment during the recession is repaired.”

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