The UK jobs market continued to shrug off the effects of Brexit as employers added an extra 179,000 staff between December and February, taking the number of people in work to a record high.
Employment hit 32.7 million during the latest quarter, the highest level since records began in 1971.
Unemployment kept at 3.9 per cent, its lowest level since 1975, the Office for National Statistics (ONS) said on Tuesday.
Wages grew 3.4 per cent, indicating that political turmoil surrounding Britain’s departure from the EU has not yet severely dented the jobs market or earnings.
However, after adjusting for inflation wages rose a more modest 1.5 per cent, leaving real average earnings languishing below their peak reached more than a decade ago.
Total pay, including bonuses, now averages £494 a week, compared with £525 in February 2008, as the financial crisis began to deepen.
Thomas Pugh, UK economist at Capital Economics warned that worse news could be in store for the jobs market.
“We suspect that this could mark the peak of employment growth as the Brexit uncertainty reached its crescendo ... And the surveys turned down sharply in March.”
But so far the jobs market has held up better than expected. The number of people unemployed fell 79,000 between December 2018 and February 2019 from a year earlier, taking the jobless figure to 1.34 million.
Economic inactivity – which covers people who aren’t in work but are not classified as unemployed because they aren’t looking for one – fell to 20.7 per cent, its lowest level since comparable records began almost five decades ago.
This was partly driven by a long-term trend that has seen more women entering the labour market.
Tej Parikh, senior economist at the Institute of Directors, said that Brexit may have actually helped to create jobs, at least in the short term. A prolonged period of uncertainty had prompted companies to hire staff rather than invest in training, technology and new machinery, he said.
“Without a pick-up in investment, low productivity will also keep wages from growing further, particularly when considering the higher regulatory costs businesses are facing this tax year.
“High employment should not lull policymakers into a false sense of security, business leaders need clarity on Brexit and faster progress on the government’s skills and productivity agenda.”
ONS deputy head of labour market statistics Matt Hughes said: “The jobs market remains robust, with the number of people in work continuing to grow. The increase over the past year is all coming from full-timers, both employees and the self-employed.”
“Earnings have now been growing ahead of inflation for over a year but, in real terms, wage levels have not yet returned to their pre-downturn peak.”
Minister of State for Employment, Alok Sharma, hailed the jobs report which he said proved “the underlying resilience of the British economy”.
He added: “But we must not take this for granted. We need to work urgently to get behind a Brexit deal that protects this jobs record and gives employers the certainty to continue to invest in their workforce and boost wages.”
Unemployment in UK regions
Northeast: 71,000, up 1,000
Northwest: 141,000, down 4,000
Yorkshire and the Humber: 135,000, down 2,000
East Midlands: 104,000, down 12,000
West Midlands: 153,000, up 7,000
East: 100,000, up 3,000
London: 218,000, down 6,000
Southeast: 155,000, up 5,000
Southwest: 76,000, down 12,000
Wales: 71,000, up 6,000
Scotland: 93,000, down 8,000
Northern Ireland: 26,000, down 4,000
An estimated 1.34 million people were unemployed between December 2018 and February 2019, a fall of 76,000 from a year earlier.
