Labour market ‘holding up well’ despite unemployment rise in Scotland

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Economists have said the Scottish labour market is “holding up well” despite a slight rise in unemployment.

The rate of people out of work increased by 0.1 per cent between July and September in Scotland, according to the latest figures from the Office for National Statistics (ONS).

The rate in Scotland is four percent, below the UK rate of 4.3 per cent, although Scotland was one of the only parts of the country where the rate increased in the three-month period.

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Dr Stuart McIntyre of the Fraser of Allander Institute at the University of Strathclyde said: “The data today show that the Scottish labour market continues to hold up well, despite challenges elsewhere in the economy.

“In particular continued increases in the employment rate, and substantial falls in youth unemployment over the past year, are to be welcomed.

“Nevertheless wage growth remains weak and with inflation increasing – and outpacing wage growth – households are going to continue to feel the squeeze. Furthermore, continued weak productivity growth in Scotland will act to limit the scope for wage growth.

“This makes it essential that action is taken to get the Scottish economy growing again.”

Stuart Mackinnon, the Federation of Small Businesses’ external affairs manager for Scotland, hailed a “remarkably stable and successful period” in Scotland’s jobs market.

“Politicians must recognise the connection between jobs, successful communities, and local firms,” he said.

“As we approach next week’s UK Government budget, the Chancellor needs to decide which direction to lead the economy. With small business confidence already very low, this isn’t the right time to put new pressures on local operators.”

Minster for Employability and Training Jamie Hepburn called the figures “encouraging”.

“Today’s figures also show the Scottish labour market continues to perform well against a difficult backdrop, echoing the most recent State of the Economy Report which shows growth over the first half of 2017, with forecasts remaining positive for the future,” he said.

“However, the lack of clarity from the UK Government on Brexit poses the biggest threat to our economy and we will continue to call on the UK Government to give people and businesses greater certainty.”

Scottish Conservative shadow economy secretary Dean Lockhart said productivity, which remains behind the UK, remained a “huge problem” for the Scottish economy, while Labour’s Jackie Baillie highlighted the fact wages have again failed to keep up with inflation, which remains at 2.7 per cent.

The Consumer Price Index, which includes food and energy prices, increased to three per cent in the year to October.