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UK Employment At Record High; Jobless Rate Lowest Since 1970s

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The UK employment rate hit a record high and the jobless rate remained unchanged at the lowest since 1970s in the three months to November, giving room for policymakers to defer a rate cut later this month.

In the three months to November, the employment rate rose by 0.6 percentage points annually to a record 76.3 percent, data from the Office for National Statistics showed Tuesday.

The ILO unemployment rate held steady at 3.8 percent, in line with expectations. This was the joint lowest since early 1975.

Employment increased by 208,000 quarter-on-quarter to a record high 32.90 million. Moreover, this was the highest quarterly growth since January 2019. At the same time, unemployment reduced marginally by 7,000 sequentially to 1.31 million.

The larger-than-expected rise in employment in November suggests the labor market has turned a corner after the weakness in the third quarter, Thomas Pugh, an economist at Capital Economics, said. That could help to convince the Bank of England policymakers to hold off cutting interest rates at the end of the month.

During the three months to November, average earnings including bonus increased 3.2 percent, slightly faster than the expected 3.1 percent. Earnings, excluding bonus, advanced 3.4 percent from the same period last year, in line with the forecast.

While pay growth has eased since last summer, with inflation remaining subdued, earnings are continuing to increase in real terms, said ONS statistician David Freeman.

In December, the claimant count rose marginally to 3.5 percent from 3.4 percent in November. The number of people claiming unemployment benefits increased by 14,900 from the previous month.

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