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UK labour market: no Brexit effect yet - HL comment

Ben Brettell, Senior Economist, Hargreaves Lansdown:

The UK’s labour market is showing remarkable resilience despite Brexit-related uncertainty, with employment at an all-time high and the jobless rate at an 11-year low. Sterling moved sharply higher on the news, reaching an eight-day high against the dollar above $1.23.

ONS stats for June to August showed 31.81m people were in work - 560,000 more than the same period last year. The increase was broad-based, encompassing both men and women, and both part time and full-time work. Wage growth fell slightly to 2.3%, showing the expected increase in inflation hasn’t yet fed through to higher pay.

Today’s release is the latest piece of evidence which shows the economy has fared better than expected since June’s referendum. A survey released on Monday showed UK consumers were at their most optimistic for five years – though sentiment in largely pro-Remain London fell slightly.

Since the vote to leave the EU, economists and commentators have been forecasting a sharp rise in unemployment as the uncertainty affects firms’ hiring decisions. The Bank of England expects a rise to 5.5% once the full effect filters through. Yet for now, the UK labour market sails serenely on.


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