UK unemployment remained strong in August, surprising analysts’ who expected businesses to exercise caution in the wake of Brexit.
The unemployment rate remaining steady at 4.9 percent in August, just 0.2 percent higher than July’s figure. It represents a 0.6 percent fall from this time last year, with the total unemployment figure standing at 1.63 million.
Businesses remain positive
The positive data suggests the job market has yet to feel a negative effect from Brexit, despite warnings from major businesses before the referendum.
Kallum Pickering from Berenberg Bank commented:
“After the Brexit vote, we had expected firms to exercise a greater level of caution, implying a fall in vacancies. Most surprisingly, the number of job vacancies rose modestly to 752k in August.
“After the Brexit vote, the heightened uncertainty about the economy outlook could imply more data volatility than normal. We should therefore remain extra-cautious in drawing too much from already volatile monthly data.
“We expect unemployment to rise modestly to 5.3% over the coming months as the economic expansion slows and firms become more cautious.”
Growth in self-employment
The figures were supported by a strong growth in self-employment and a lean towards part-time working. According to the Association for Independent Professionals and the Self Employed, the shift is a sign of a “long-term structural change in the labour market.”
“Today’s figures mark a continued trend of individuals making the choice to work for themselves. The number of self-employed workers is soaring, growing almost four times faster than employees… There’s little evidence of this trend slowing any time soon, and it appears the uncertainty around Brexit didn’t stop these workers going it alone in the run-up to the referendum.”
Growth in average weekly earnings also slowed slightly, showing a 2.3 percent increase on last year but remaining ahead of the UK’s 0.6 percent inflation rate.
FTSE up on data
The FTSE moved up on Wednesday on the back of the jobs report, spending the day in positive territory. The index is currently up 0.41 percent at 6691.15 (1626GMT).