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UK Employment Hits Record High, Pay Growth Biggest In Decade

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The UK employment hit a record high in December and the workers' pay grew at the fastest pace in a decade amid steady unemployment, despite the Brexit chaos.

The employment level grew by 141,000 sequentially to a record high 32.54 million in the three months to November, figures from the Office for National Statistics showed on Tuesday. Economists were looking for an increase of 87,000.

The rate of employment rose to 75.8 percent, which was the highest since comparable records began in 1971.

The number of unemployed was 1.37 million in the three months to November, broadly unchanged from the previous three months ended August. The figure dropped by 68,000 from a year earlier.

The ILO jobless rate was 4 percent in the three months to November, which was the lowest since December 1974 to February 1975 period, and unchanged from the three months ended August.

Economists had expected the rate to remain unchanged at 4.1 percent recorded for the August to October period.

The unadjusted average weekly earnings excluding bonuses grew 3.3 percent year-on-year, in line with economists' expectations, and unchanged from October.

Including bonuses, earnings rose 3.4 percent from a year ago, which was the biggest increase since July 2008. Economists had expected the pay growth to remain steady at October's 3.3 percent.

"The labor market figures for November were reassuring as they showed no sign of any hit to firms' hiring from Brexit," Capital Economics economist Andrew Wishart said.

"And with pay growth also strong, households remain well placed to increase spending if and when the Brexit handbrake is released."

The economist doubt if the Bank of England Monetary Policy Committee would wait long to hike interest rates if and when a resolution to Brexit is reached, as the annual pay growth is already above the 2.75 percent the bank predicted in the fourth quarter of 2018.

That said, until the current Brexit impasse is resolved, the Committee will probably sit on its hands, Wishart added.

Separate data from the ONS showed that the UK budget deficit for December exceeded economists' expectations and was the second lowest figure for the month in 18 years.

The public sector net borrowing, or PSNB, was GBP 3 billion in December, which was GBP 0.3 billion more than a year ago. Economists had forecast borrowing of GBP 1.9 billion.

That was the lowest December borrowing for 18 years, save for a GBP 2.7 billion borrowing in December 2017.

The PSNB was GBP 35.9 billion in the year-to-date period, which was GBP 13.1 billion less than the same period in 2017. That was also the lowest year-to-date figure for 16 years.

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