UK employment surges to record high, wages edge up

LONDON (Reuters): The number of people in work in Britain surged and one measure of wage growth rose to a near one-year high, according to data that may encourage some Bank of England policymakers to think interest rates should rise again before long.

Sterling touched $1.41, its highest level against the US dollar since the 2016 Brexit vote, and British government bond prices sank to their lowest level since October after Wednesday’s stronger-than-expected headline figures.

Britain’s economy slowed in 2017 as higher inflation – caused by a post-Brexit referendum fall in the pound - hurt the spending power of consumers. But forecasts of a bigger hit to growth did not materialise and job creation remained strong.

The Office for National Statistics (ONS) said the number of people in work rose by 102,000 in the three months to November, the biggest increase since the period to July and taking those in employment to a record 32.2 million.

A Reuters poll of economists had pointed to a fall of 13,000 in employment.

Full-time jobs accounted for most of the increase, with workers aged 50 to 64 benefiting the most.

Overall, the figures went some way to alleviating worries that Britain’s labour market was running out of steam after a couple of months in which employment fell slightly.

“Today’s jobs numbers once again strongly suggest that the UK economy is on a firmer footing than many had anticipated following the EU referendum vote,” James Athey, senior investment manager at Aberdeen Standard Investments, said.

The BoE increased interest rates for the first time since 2007 in November as most of its policymakers thought steeply falling unemployment would soon start to push up wages – a forecast that Wednesday’s data justified, Athey added.