Jobless close to record low but interest rate may still be cut
Jamie Hepburn: ‘making Scotland’s workplaces fairer’ (pic: Terry Murden)
Unemployment in Scotland over the last quarter of 2019 fell to 3.5%, close to the record low and 0.3 percentage points lower than the UK rate (3.8%).
Business Minister Jamie Hepburn reflected the benefits of a strong and inclusive labour market.
Scotland’s employment rate rose over the quarter to 75% and remains close to the highest on record. This is mostly driven by a rise in the employment rate of women of 0.9 percentage points to 71.4%.
The unemployment rate for men fell to 3.3% – the lowest on record and lower than the UK’s (3.9%).
Across the UK Unemployment decreased by 16,000 to 1.29 million in the three months to December, according to ONS figures..
“As we set out in the Programme for Government, we will continue to make Scotland’s workplaces fairer through our work to tackle the gender pay gap, reduce the disability employment gap and demonstrate leadership in tackling race inequality in employment,” said Mr Hepburn.
Commenting on the solid figures across the UK, Thomas Pugh from Capital Economics, said they will provide some reassurance to the Bank of England.
“Overall, the strength in the labour market in Q4 will give some comfort to the MPC [the Bank’s monetary policy committee] that it was right to keep rates on hold at 0.75% at its meeting on 31 January,” he said.
“Of course, this is all old news, but the most recent surveys are suggesting that employment growth will continue to pick-up in Q1, which we think will contribute to the MPC keeping rates on hold at its next meeting on 26 March as well.”
However, Tom Stevenson, investment director at Fidelity International says: “The bigger than expected slow-down in wage growth to just 2.9% in the three months to December re-kindles speculation that the next move in UK interest rates might be down.”
Commenting on the Scottish figures, Scottish Labour Leader Richard Leonard said: “Today’s labour market statistics are further evidence if any was needed that this SNP government has no clear industrial strategy and is letting down the workers of Scotland.
“The number of those in work is down, and the number of those who are economically inactive is rising at an alarming rate.
It is not good enough for the SNP to manage decline.– Richard Leonard, Scottish Labour
“Women are bearing the brunt of this government’s lack of strategy with 12,000 more women out of work and women now accounting for over half of those not in work in Scotland.
“Enough is enough. It is not good enough for the SNP to manage decline. This year’s budget is an opportunity to turn around 13 years of mismanagement and prevent further cuts to councils and local communities which would be a start.
“The SNP must set about constructing a viable industrial strategy that will provide the high-skill, high-pay jobs that the people of Scotland badly need.”