Rate of employment in UK takes biggest tumble in four years – The Guardian

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Employment in the UK has fallen at its fastest rate in four years amid growing evidence that a slowing economy is taking its toll on the labour market.

Figures from the Office for National Statistics showed that pay growth had fallen back in the three months to September, leading to speculation that the jobs market is past its peak.

Publishing data that may increase the chances of a cut in interest rates from the Bank of England, the ONS said employment had fallen by 58,000 during the third quarter of 2019. It was the biggest fall since May 2015.

The drop in employment was smaller than the 102,000 fall the financial markets had been expecting but job vacancies continued to be scarcer and saw their biggest annual fall since late 2009.

Strong growth in employment has been a feature of the economy in recent years but a slowdown in growth and heightened Brexit uncertainty made businesses more cautious about hiring during the summer.

The fall in employment was accompanied by an easing of annual earnings growth to 3.6% on both the measures used by the ONS – including and excluding bonuses.

Inactivity – the number of people of working age who have stopped looking for a job – also rose and their removal from the jobless count meant unemployment fell in the latest quarter by 23,000 to 1,306,000. The unemployment rate dipped from 3.9% to 3.8%, its joint lowest since the winter of 1974-5.

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Real earnings, pay packets adjusted for inflation, are estimated to be up by 1.8% including bonuses and by 1.7% excluding bonuses, helping to underpin consumer spending.

But the TUC general secretary, Frances O’Grady, said: “Working families are thousands of pounds out of pocket after a decade of dismal pay growth. That is not right. The Conservatives have presided over the longest wage squeeze since Napoleonic times. They have nothing to boast about.”

Chris Williamson, chief economist at IHS/Markit, said news on Monday that the economy had contracted in both August and September had “been swiftly followed by a warning of how the growing economic malaise is feeding through to the labour market. Official data from the Office for National Statistics showed employers cutting headcounts at the fastest rate for four years in the third quarter.”

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