The UK employment rate has reached its highest level since records began in 1971 at 74.6 per cent, the latest Labour Force Survey from the Office for National Statistics shows.
In the fourth quarter of 2016 the number of people in work increased from the previous quarter, the number of unemployed people stayed at a similar level and the number of people not working or available to work decreased.
There were 31.84 million people in work in Q4 last year, 37,000 more than in Q3 and 302,000 more than the previous year. Unemployed people totalled 1.6 million, 97,000 fewer than the previous year with the unemployment rate dropping to 4.8 per cent from 5.1 per cent a year earlier; the first time it has been lower since Q3 2005.
According to the ONS, the lowest employment rate – which takes into account all 16-64-year-olds – was 65.6 per cent in 1983, with employment rates generally increasing since early 2012.
While total pay increased by 2.6 per cent between Q3 and Q4 2016, this was lower than the growth rate between Q3 and Q4 2015, which was 2.8 per cent.
Laith Khalaf, senior analyst at Hargreaves Lansdown, says: “Unemployment remains at rock bottom levels despite concerns over Brexit, though the labour market is a lagging rather than a leading indicator of economic performance. However wages are now heading in the opposite direction to inflation, and that spells trouble for household budgets as we move through the year.”