Unemployment in the North East has hit a record low and the region has lost its unwanted title of having the highest rate in the UK, new figures show.
Data from the Office for National Statistics (ONS) shows that unemployment in the region in the three months to the end of August stood at 4.4%, the second month in a row that the rate had fallen significantly. There was another rise in the number of people judged ‘economically inactive’, however, with the North East having the highest rate in England, Scotland and Wales at 25.5%.
Nationally the UK’s unemployment rate dropped to its lowest for almost half a decade but more Britons left the labour market completely due to a rise in long-term sickness. The new data also showed another slight improvement in pay but it continues to lag far behind inflation.
Read more: North East groups warn Government against benefit changes
The low unemployment rate has not dispelled concerns about weaknesses in the regional and national economy, however, and some business groups warned that the low unemployment rate was presenting challenges to companies.
A spokesman for the North East England Chamber of Commerce said: "In the North East, the unemployment rate has improved by 0.8% compared to June-August last year. However, the employment rate is 0.1% lower, and economic inactivity has worsened by 0.8%.
"Even compared to last month’s employment statistics, the North East’s economic inactivity rate has worsened by 0.2%. This shows more needs to be done to help people access the job market.
"The new Government has set out its plan, which includes addressing the NHS backlog and helping people into work. For the Government’s growth strategy to succeed, it must be inclusive of those who are struggling to access the labour market."
And Helen Golightly, chief executive of the North East LEP, said: "It is a cause for concern that both nationally and in the region we have seen the number of people in employment fall, unemployment fall and further growth in the number of people becoming economically inactive – where they are not looking for work. There is also evidence of the number of overall jobs available falling from previous high levels, especially in businesses employing fewer than 50 people.
“Nationally and regionally the labour market is slowing. There are currently 71.2% of people aged 16-64 in work, but the region still hasn’t recovered to pre-Covid levels of employment. At this time, people and businesses are focused on the cost of living and costs of doing business given rises in inflation and interest rates."
On Monday an influential business survey revealed that companies in the North East are being held back by inflationary pressures and fears of an imminent recession.
Reacting to the low unemployment rate, Chancellor Kwasi Kwarteng said: “Countries around the world are facing economic challenges but today’s statistics remind us that the fundamentals of the UK economy remain resilient, with unemployment at its lowest point for almost 50 years. Our ambitious growth plan will drive sustainable long-term growth, meaning higher wages and better living standards for everyone, and we are cutting taxes so people can keep more of what they earn.”
The West Midlands now has the UK's highest rate of unemployment at 4.7%.
READ NEXT:
* Bus drivers to strike over depot closure
* Warning over rota gaps in local NHS
