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Key figures

  • The UK unemployment rate was 4.0% in October-December 2018, the joint lowest rate since 1975. The ILO measure of unemployment was 1.36 million people, 14,000 fewer than the previous quarter and 100,000 fewer than the year before.
  • The number of people in employment was 32.60 million, 167,000 more than the previous quarter and 444,000 more than the year before. The employment rate was 75.8%, the joint highest rate since comparable records began in 1971.
  • 8.63 million people aged 16-64 were economically inactive, 94,000 fewer than the previous quarter and 153,000 fewer than the year before. The inactivity rate was 20.9%.
  • Average weekly pay for employees in Great Britain increased by 3.4% both including and excluding bonuses in the three months to December 2018 compared with the previous year.
  • CPI inflation averaged 2.3% over this period, meaning that average earnings both including and excluding bonuses grew faster than prices.

Effect of Universal Credit

The claimant count figures provided in this paper are affected by the ongoing rollout of Universal Credit.  The claimant count comprises people claiming Jobseeker’s Allowance, or people claiming Universal Credit who are required to seek work. Under Universal Credit, a broader span of claimants are required to look for work than under Jobseeker’s Allowance. This has the effect of increasing the number of unemployed claimants. So changes in claimant numbers may be a consequence of the Universal Credit rollout rather than changes in economic conditions.

The effect is most visible in areas operating Universal Credit “Full Service”, where rollout of Universal Credit is more advanced: in these areas, there tends to have been a sharp increase in the claimant count over the past year.

In order to adjust for this effect, the Department for Work and Pensions (DWP) published for the first time on 22 January 2019 an ‘alternative’ claimant count series. The alternative series modelled what the count would have been from 2013 onwards had Universal Credit been operating fully, to capture the ‘broader span’ of claimants covered by Universal Credit. So as well as counting people who were indeed claiming unemployment benefits, it includes people who may not have been claiming at the time but who would have been required to look for work had Universal Credit been in place.

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