The prospect of the August increase in interest rates from the Bank of England appeared more after the latest official data showed that U.S. jobs growth pushed employment in the UK increased in the first three months of 2018.
Despite the slow pace of growth in more than five years, according to the National Bureau of statistics said there were 32.34 million people in work in the first quarter of this year, an increase of 197,000 compared to the previous quarter and 396,000 on the first three months of 2017.
The employment rate in the UK rose by 0.4 points to 75.6% in the last quarter, the highest since modern records began in 1971. Most of the jobs created full-time posts.
City economists said that the strong labor market increases the chances of growth was revised from the initial estimate, the ONS is only 0.1% in the first quarter of 2018, the lowest level since 2012.
But employment growth and almost stagnant production has led to a new decline in productivity after growth in the second half of 2017. Output per hour fell 0.5% in the first three months of 2018 and increased by 0.2% in the year since the financial crisis of 2008.
The ONS has reported a mixed picture for the wages. The growth in total remuneration in the first quarter of 2018 grew by 2.6% compared to the previous year, which is less than the annual growth of 2.8% in the three months to February.
Regular pay, which excludes bonuses – 2.9% more than a year ago, a slight increase compared to 2.8% annual growth in the previous month.
The ONS said that when inflation was taken into account, real wages grew by 0.4% a year ago, and total wages were flat.
Ministers seized on the basis of evidence of job creation and decline in the living standards of the population as evidence that the economy has turned the corner after a tough 2017.
Philip Hammond said: “the increase in real wages means that people begin to feel the advantage of more money in their pockets, another turning point as we build a strong, equitable economy.”
“We can be proud of our achievements in the field of workplaces”, – added the Chancellor. “The unemployment rate is at its lowest for 40 years and with our national ‘living wage’, we make sure that the lowest paid feel the benefit from an additional $ 2,000 per year. Now the focus must be on ensuring that wages grow faster than inflation, because the increase in standard of living.”
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Unemployment on the internationally agreed definitions that 46,000 to 1.42 million in the fourth quarter of 2017 and first quarter of 2018. The unemployment rate of 4.2% was the lowest since 1975.
Ons senior statistician Matt Hughes said, “again, employment in the three months to March, the rate reached a new record, unemployment remains at its lowest level since 1975.
“Employment growth continues to persecute citizens of the UK, with a small decline over the last year the number of foreign workers. It is important to remember that this is not an indicator of migration”.
James Smith, an economist at ING Bank, said strong data on the labor market made the August interest rate hike from the Bank of England is likely.
“As markets have become increasingly skeptical about the prospects for rates in the UK the campaign this year, according to the latest wages can push a little rethink.
“By 2.9%, consumer price growth excluding bonuses is now at the fastest rate since mid-2015 and will make the Bank of England more assured that their optimistic attitude on wage growth is bearing fruit. Remember that the research evidence from the banking agents of England shows that the best year for payment calculations after the crisis.”
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