Unemployment rate at 11-year low

The Office for National Statistics (ONS) has confirmed that the UK unemployment rate fell to 4.9% for the period of March-to-May 2016 – its lowest level since July 2005. Whilst unemployment fell across the UK as whole, some regions have faired better than others. The North-East remains the country’s jobless blackspot as the amount of people not working in the region means it lags well behind Wales, the North-West and the Midlands and is thought to be  twice the amount than in the South-East. The figures listed cover the period before the UK voted to leave the EU and some analysts have warned that the outcome of the vote will mean that the overall positive trend may not continue.

It appears that confidence in certain sectors is higher than in others. For example McDonalds has recently announced it is creating 5,000 jobs in the UK, ITV have posted healthy financial results (but expects advertising revenue to fall slightly in the year ahead), Taylor Wimpey confirm that the demand for new homes remains solid, whilst the pharmaceutical firm GSK says it intends to invest a further £275 million in its British operations despite having backed the Remain campaign.

In the financial sector the Lloyds Banking Group has announced that it is to axe 3,000 jobs and close 200 branches as it prepares for a cut in interest rates following Britain’s decision to quit the European Union. In addition, the University of Strathclyde’s Fraser of Allander Institute has warned that Scotland faces a sharp slowdown in growth and higher unemployment over the next few years as a direct result of the Brexit vote. The Institute stated that a prolonged period of “economic uncertainty and financial volatility” was unavoidable. It also warned this would carry risks for investment, household incomes and jobs.

It is thought that Brexit will almost certainly now cause other businesses to put hiring decisions on hold or cut-back on staff altogether. It subsequently remains to be seen if the UK will continue to enjoy its lowest levels of unemployment in 11 years when the next set of figures are announced by the ONS in the coming months.