Unemployment in the North East has fallen to another record low despite concerns from many groups about the state of the regional economy.
New figures from the Office for National Statistics show the region’s unemployment rate fell to 4.2% in the three months to the end of September, lower than the previous record low of 4.4% recorded last month and close to the national average of 3.6%. The North East no longer has the highest unemployment rate in the UK, which is instead in the West Midlands.
The positive news on unemployment - which was hailed on a visit to the North East last week by Bank of England governor Andrew Bailey - comes at a time of rising concern for the state of the economy, with one business group saying the outlook for companies was “very bleak” and a survey showing record low confidence for local firms.
Read more : cost of living map reveals stories of real-life struggles in North East
In a complicated picture, the ONS statistics also show that the number of people in the North East not looking for work and classed as ‘economically inactive’ remained above 25% and was the highest in England, Scotland and Wales. The new data also pointed to falling real-term wages and a large number of strikes as workers sought higher pay.
Darren Morgan, director of labour and economic statistics at the Office for National Statistics (ONS), said: “The proportion of people neither working nor looking for work has risen again. Since the onset of the pandemic, this shift has largely been caused by older workers leaving the labour market altogether, but in the most recent quarter the main contribution has actually come from younger groups.
“August and September saw well over half a million working days lost to strikes, the highest two-month total in more than a decade, with the vast majority coming from the transport and communications sectors. With real earnings continuing to fall, it’s not surprising that employers we survey are telling us most disputes are about pay.”
He added: “Job vacancies continue to fall back from their recent peak, with increasing numbers of employers now telling us that economic pressures are a factor in their decision to hold back on recruitment. The biggest driver behind the fall came from hospitality, followed by retailing and wholesaling.”
British Chambers of Commerce head of people policy Jane Gratton said: “The challenges facing businesses in the UK labour market remain very much the same. We have a critical shortage of skills and labour that is damaging firms and holding back growth.
“Once again, the data shows the number of job vacancies remains at record highs, adding to inflationary pressures. With confidence waning as we enter recession, and the expectation of even tougher economic times ahead, we may see more recruitment freezes, job losses and business closures.
“But the underlying problem is unaltered - unless we address the ongoing mismatch of skills available and business needs, this drag anchor on the economy will persist and hinder recovery.”
In a big week for the economy, tomorrow will see the latest inflation figures released while Chancellor Jeremy Hunt will make his autumn statement on Thursday.
READ NEXT:
