Strong job figures support Q4 growth forecast, says BCC

23rd December 2013

In the three months to October 2013, the unemployment rate fell to 7.

4%, a larger fall than expected · In the three months to October, employment rose 250,000, compared with the previous three months, while unemployment declined by 99,000 · Total pay rose less than 1% compared with a year ago · Between June and September 2013, private sector employment rose 246,000, while public sector employment increased by 4,000 Commenting on the labour market statistics for December 2013, published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said: -These are very strong labour market figures, which back our recent forecast of increased growth in the fourth quarter of this year. Employment is up, unemployment is down, inactivity is down, and while youth and long-term unemployment remain high, there has been an improvement in these areas. The strong growth in private sector employment at a time when public sector jobs are stagnating proves that businesses are up for the challenge, and are doing all they can to drive the recovery. -The only sticking point is that earnings growth remains below 1%. However inflationary pressures are now muted, given the recent fall seen this week. So despite the bigger than expected drop in the unemployment rate to 7.4%, the MPC should continue to ignore calls from the markets to raise interest rates prematurely. The MPC is now in a position where it can deliver a virtuous combination of low inflation and low interest rates, which is what will help businesses continue to grow, expand, and create jobs.

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