UK employment hits highest level in half a century in November

The ranks of the employed in Britain reached their highest level since at least nearly half a century ago in the quarter to the end of November, although one measure of wage growth disappointed again - leaving economists divided on the inflation outlook in its wake.

There were 267,000 more people with jobs in those three months, when compared to the previous quarter, and 588,000 more than a year ago, figures from the Office for National Statistics showed.

That helped push the employment rate to 74.0% - its highest since records began in 1971.

Unemployment over that same time frame fell to a rate of 5.1% (consensus: 5.2%), seven tenths of a percentage below where it stood a year back, to its lowest since the period between August to October of 2005.

That progress came alongside a reduction in the number of those who were economically inactive, defined as those who were neither working nor available to work during the quarter.

Wages lagging behind forecasts

Average weekly earnings for employees increased by 2.0% including bonuses (consensus: 2.1%) in the three months to November and by 1.9% excluding bonuses (consensus: 1.9%) when compared with a year earlier.

As of 11:10GMT cable was just 0.07% lower to 1.4167, albeit after hitting an intra-day low of 1.4126.

New people claiming unemployment benefits, the so-called 'claimant count', slipped by 4,300 (consensus: +4,000) in December to reach 785,900.

Economists divided on wages, inflation

"Today's labour market figures are positive and strong but the slowest pace in earnings growth since February last year suggests that underlying pressures on inflation may be easing," said Jonathan Thomas, senior economist for Lloyds Bank Commercial Banking.

"Even these meagre rate of pay growth therefore suggest that unit labour costs are rising quickly enough to pull inflation back to its target, once the drag from lower oil prices has worked its way through [...] with the National Living Wage set to be introduced in April, the first half of 2016 likely will see a renewed renewed acceleration in wages, bringing interest rate hikes swiftly back into focus," said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.