The North East’s unemployment rate remains the highest in the country but has fallen significantly to go below 5% for the first time in more than a year.
New figures for the Office for National Statistics (ONS) show the rate of joblessness in the region at 4.7%, above the national average of 3.6% but well below the 5.1% figure recorded in the previous two months. The number of people claiming unemployment benefit fell below 70,000 to stand at 69,165.
The figures - which cover the three-month period to the end of July - come despite fears of a slowdown in the economy and data showing that rising costs are putting big pressure on businesses and reducing consumer confidence.
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Last week’s announcement of Government support on energy bills has raised hopes that the worst fears of a recession and widespread business failures can be avoided. But business groups have warned that many companies’ prospects are being held back by their inability to hire suitable staff.
Jane Gratton, head of people policy at the British Chambers of Commerce, said: “With firms doing their best to keep afloat during a period of spiralling costs, they are also facing an extremely tight labour market which is further impacting their ability to invest and grow.
“Despite a second month of a decrease in job vacancies, the overall number of vacancies in the labour market remains high. With over 1.2m unfilled jobs across the country, labour shortages have reached crisis levels for businesses across many sectors and regions.
“During a period of increasing inflation, and a stagnant economy, we cannot afford to let recruitment problems further dampen growth.”
The figures also showed that UK workers saw their pay fall behind inflation despite another hike in earnings as the cost-of-living crisis hit hard.
Regular pay, excluding bonuses, grew by 5.2% over the three months to July, the ONS said, but with Consumer Prices Index (CPI) inflation taken into account, real pay tumbled by 3.9% year-on-year.
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