UK employment falls for first time since aftermath of Brexit vote

Britain has seen its first fall in employment since the immediate aftermath of last year’s Brexit vote amid signs that slower growth has reduced demand for workers.

The Office for National Statistics (ONS) said the number of people employed had fallen by 14,000 in the three months to September to just over 32 million.

While the number of people in work was still up by 279,000 on a year ago, the ONS said it was the first fall since the slight reduction in the quarter ending in October 2016 and the biggest drop since the April to June period of 2015.

The number of people unemployed fell by 59,000 in the three months to September, bringing the total down to 1.425 million.

The ONS said both employment and unemployment were down due to a rise in the number of the economically inactive – people who have stopped looking for work.

Further evidence of a weaker labour market came from a fall in job vacancies, a 29,000 decline in the number of full-time jobs and an increase in the number of part-time workers saying that they would like to have full-time employment.

The ONS statistician Matt Hughes said: “After two years of almost uninterrupted growth, employment has declined slightly on the quarter.

“However, it remains higher than it was this time last year, and as always we would caution people against reading too much into one quarter’s data. Unemployment also fell on the quarter, but there was a rise in the number of people who were neither working nor looking for a job – so-called economically inactive people.”

The slowdown in employment coupled with modest growth in the economy’s output resulted in a sharp improvement in the UK’s productivity rate, which was up by 0.9% between the second and third quarters of 2017 – its fastest rate of increase in six years.

Earnings excluding bonuses were 2.2% higher in the three months ending in September than they were in the same three months of 2016 – no change on the upwardly revised figures for the period ending in August.

James Smith, a UK economist at ING bank, said: “The standout feature of today’s jobs report is the unexpected fall in employment. Markets will focus on the 14,000 fall over the three months to September, but the picture looks much more concerning when we delve into the “single month” changes, which indicate that the economy has shed 225,000 jobs over the past two months.

“This is interesting because it raises the question of whether the growth slowdown we’ve seen throughout 2017 is starting to take its toll on the jobs market – and whether the boost from the stronger economic momentum in late 2016 is beginning to fizzle out.”

Follow Guardian Business on Twitter at @BusinessDesk, or sign up to the daily Business Today email here.