Unemployment has fallen slightly in the North East but remains the highest in the UK, new figures show.
Figures for the three months to the end of May show that the rate of unemployment in the region stood at 5.1%, a small fall from last month, but still above the national average of 3.8%. The number of people claiming unemployment benefits also fell, to 70,400.
The North East also had the highest rate of economically inactive people, with almost a quarter of the eligible workforce not available for work. The statistics also showed that real pay in the UK is falling at the fastest rate since records began as pay rises fail to keep pace with inflation.
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ONS head of labour market and household statistics David Freeman said: “Today’s figures continue to suggest a mixed picture for the labour market. The number of people in employment remains below pre-pandemic levels and, while the number of people neither working nor looking for a job is now falling, it remains well up on where it was before Covid-19 struck.
“With demand for labour clearly still very high, unemployment fell again, employment rose and there was another record low for redundancies. Following recent increases in inflation, pay is now clearly falling in real terms both including and excluding bonuses. Excluding bonuses, real pay is now dropping faster than at any time since records began in 2001.”
Jane Gratton, head of people policy for the British Chambers of Commerce, said: “The labour market remains incredibly tight, in many cases affecting firms’ ability to maintain normal operations. Although these figures show the employment rate has risen it is having no noticeable impact on the overall number of job vacancies.
“The problems in the labour market are restricting growth and choking off any hope of a recovery for many firms; as inflation, supply chain disruption and energy costs also add to their headaches.
“But there are several avenues open to businesses and the Government to shift this data in the right direction. We need to bring more economically inactive people back into the UK labour market by offering flexible working practices, rapid re-training opportunities and a focus on workplace healthcare and support.
“The Government must also reform the Shortage Occupations List criteria to include more jobs at more skill levels to give firms breathing space to train and upskill their workforce. The huge number of vacancies is holding back productivity and growth, and employers are at their wits’ end.”
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