By Marcus Leach
The Office for National Statistics figures revealed that the unemployment rate fell to 8.0%, down from 8.2% in the previous quarter, as the total fell by 46,000 to 2.56 million.
With employment up, and unemployment down, the overall picture is, for once, leaning towards the positive, a view taken by David Kern, Chief Economist at the British Chambers of Commerce (BCC).
“The latest job market figures are encouraging, and act as a welcome contrast to recent pessimism about the UK economy. Employment is up, unemployment is down, and the rate of inactivity is at its lowest since 1991," he said.
However, there are still concerns remaining, and it would be foolish to ignore these and assume that one set of positive data implies all is well with the economy.
“But there are still areas of concern. Youth unemployment is unacceptably high, and too many people are still being forced to work part-time as they cannot find a full-time job," Mr Kern continued.
"While unemployment is likely to increase over the next 12-18 months, the peak may now be lower than the 2.9m figure we predicted in our last forecast.
“Overall, these figures show positive trends in the UK labour market and are difficult to reconcile with other ONS figures, which show three consecutive GDP declines since the end of 2011. If both sets of figures are correct, they imply large declines in productivity, which seems implausible. It is my belief that this could lead to revisions to the GDP statistics in due course.
“Regardless, it is clear is that growth in the UK economy is still too weak. Problems in the eurozone and tough austerity measures will continue to exert downward pressures on domestic demand. The government must build on these positive job figures by considering policies that help businesses deliver growth. This would include more deregulation, an increase in infrastructure spending, and crucially, the creation of a state-backed business bank.”
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