North East sees biggest rise in employment, according to new figures

The North East’s unemployment rate has improved slightly in three months following the General Election, new figures show.

Data from the Office for National Statistics shows that the region’s unemployment rate fell marginally to 5.5% between July and September, with the number of people classed as economically inactive also reducing. That means that the North East has lost the unwanted title of having the UK’s highest rate of unemployment, with higher levels now seen in London. But the region is still significantly above the national average of 4.3%.

The UK’s official statistics agency has warned changes in the way it measures the country’s labour force has meant current figures have been volatile and have been treated with some caution in recent months. But it believes the figures are now reasonably robust, and point to the North East having the largest increase in employment in the country over the last three months.

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Nationally, the rate of UK unemployment rose to 4.3% in the three months to September, up from 4% in the three months to August, the Office for National Statistics said. UK average regular earnings growth fell to 4.8% in the three months to September and was 2.7% higher after taking Consumer Prices Index inflation into account.

The slowdown in wages growth has helped pave the way for interest rate cuts from the Bank of England, which last week delivered a reduction to 4.75% from 5% - the second decrease this year. But it comes amid mounting warnings from business giants over the impact of the Chancellor's Budget move to increase employers' national insurance contributions on jobs and prices for consumers.

Josh Maratty, policy advisor intern at the North East Chamber of Commerce, said: "As part of a Get Britain Working white paper, the Government announced in the Budget that it is investing £240m to trial new ways of getting people back into work, including tackling ill health, which we know is a key barrier to growth. The Government is also reforming employment rights as part of its proposals for a New Deal for Working People and has committed to work in partnership with businesses, trade unions and civil society to shape the next steps.

"We held a roundtable recently with North East mayor Kim McGuinness, regional MPs and multi-sector businesses to give our members the opportunity to inform the new government’s thinking in this important area for modern business. We will be using feedback from our members following the Budget and from our roundtable with members to highlight to government the practical implications of these reforms on businesses and how this will impact key areas such as recruitment and retention, as well as security and pay."

Work and Pensions Secretary Liz Kendall said: “While it’s encouraging to see real pay growth this month, more needs to be done to improve living standards too. So, from April next year, over three million of the lowest-paid workers will benefit from our increase to the national living wage, delivering a £1,400-a-year pay rise for a full-time worker.”