Britain's job miracle back on track as companies hire more workers

Jobs
Unemployment is so low that companies are struggling to find the workers they need, and economists think the jobless rate will keep on sliding Credit: MLADEN ANTONOV/AFP/Getty Images

Britain’s jobs miracle is back on track after companies renewed hiring in ­November, setting the economy up for a strong start to the year and quelling concerns that employment was slowing.

Figures are set to show that the economy grew 0.4pc in the final quarter of 2017, pushing GDP up 1.8pc for the year and defying fears of a slowdown. The buoyant numbers indicate the economy is on a relatively healthy trajectory despite fears of a slowdown.

Jobs data are also expected to be ­encouraging. Analysts believe the disappointing figures for the three months to October are likely to prove a blip, with the economy still creating more employment into 2018.

Unemployment could have fallen to a fresh 42-year low of 4.2pc in the year to November, according to Alan Clarke at Scotiabank. The average forecast is for joblessness to stay at 4.3pc.

“Pretty much every single month this year unemployment has fallen by at least 11,000, so I am going on the basis that the 4,000 rise last month was a blip, and this time it will drop by 7,000 to 10,000,” Mr Clarke said. “And there is potential for it to go even lower.”

His words echo those of Michael Saunders, a monetary policymaker at the Bank of England, who said last week that joblessness should keep falling. “My hunch is that the labour market will probably tighten further this year, with the jobless rate dropping to – and perhaps even below – 4pc during 2018,” he said. “The economy and ­labour demand are likely to hold up a bit better than many expect.”

Michael Saunders
The bank of England's Michael Saunders expects unemployment to fall further this year

There are risks to the numbers, however, particularly around GDP.

“The wildcard will be the closure of the Forties oil and gas pipeline (which carries 40pc of North Sea production) for much of December,” said Andrew Goodwin at Oxford Economics, predicting GDP growth of 0.4pc. “That this came so late and involved a relatively small sector leads us to believe it will not have a material impact, but it does add downside risk to our forecast.”

 

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