Record 32.2 million people in work but pay not keeping pace with inflation

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The number of people in work has reached a record high amid strong demand for workers, although the real value of pay continues to decline, new figures show.

There were just over 32.2 million people in employment in the three months to November, an increase of 102,000 on the previous quarter and the biggest total since records began in 1971.

The UK's employment rate is now at a joint record high of 75.3%, reported the Office for National Statistics (ONS).

Unemployment fell by 3,000 to 1.44 million, which is 160,000 lower than a year ago.

The claimant count, which includes people on Jobseeker's Allowance and the unemployment element of Universal Credit, increased by 8,600 last month to 832,500.

Average earnings increased by 2.5% in the year to November, unchanged from the previous month, although pay is still growing at less the rate of inflation.

The number of people classed as economically inactive, including students, those on long-term sick leave, taken early retirement or who have given up looking for work, fell by 79,000 to 8.7 million, the lowest since the winter of 2000-01.

Job vacancies were up by 17,000 to a record 810,000.

ONS statistician David Freeman said: "With the employment rate returning to a joint record high and the number of vacancies setting a new record, demand for workers clearly remains strong.

Moreover, economic inactivity is at its lowest since the winter of 2000-01.

"Nevertheless, inflation remains higher than pay growth and so the real value of earnings continues to decline."

The rise in employment has been driven by full-time jobs, with the number of self-employed falling by 82,000 in the latest quarter to 4.77 million, the biggest cut since 2004.

Economic inactivity has fallen by 167,000 over the past year, with a big fall among the long termsick.

- The number one single in the charts the last time economic inactivity was so low was Bob The Builder.

- The ONS cautioned that the claimant count may be providing a misleading representation of changes in the labour market because of the impact of the roll-out of Universal Credit.