"The healthy performance of the labour market provides more evidence that growth has not slowed markedly in the second quarter ahead of the looming referendum," said Ruth Miller at Capital Economics.
Private sector wage growth rose to 2.7% y/y in April from 2.3% in March. Given near-flat productivity, higher inflation lies ahead.— Samuel Tombs (@samueltombs) June 15, 2016
Michael Martins, an economist at the Institute of Directors said firms were "keeping calm" ahead of the referendum, while David Kern at the British Chambers of Commerce said that "the economy may not have softened as much as feared in the early months fo 2016. Our flexible dynamic labour market remains a source of strength for the UK economy." "Job creation has continued despite … drags on growth and regular pay growth has also edged up, helped by the introduction of the national living wage in April," said John Hawksworth, chief economic at PwC. These figures are the first that include the period after the implementation of the national living wage – which created an extra band of the minimum wage at £7.20 an hour for those over the age of 25. At five per cent the unemployment rate is now in line with the Bank of England's estimates of full employment, meaning that further falls would put upward pressure on inflation. Should the UK vote to stay in the EU – and market volatility recedes – "a rate hike might come back on the agenda before too long," according to Miller.