Employment levels reach record high

The Government said the official jobless figures, which also showed a 61,000 fall in unemployment in the quarter to December to 1.61 million, the lowest for almost two years, highlighted that the UK continued to have a strong and stable labour market.

But within hours of the figures being published, a series of job cuts were announced, including 600 losses at the Devonport dockyard in Plymouth, 100 at an industrial paints factory in Lancashire, and 150 at a sofa-making company in South Wales.

Meanwhile, a cloud of uncertainty hung over up to 1,100 jobs at Pickfords, the UK's oldest removals firm, after its owner warned the business faced going into administration unless a buyer could be found.

Official data from the Office for National Statistics (ONS) showed that UK employment increased by 175,000 in the three months to December to 29.4 million, the highest figure since comparable records began in 1971, while the number of people claiming Jobseeker's Allowance fell by 10,800 in January to 794,600, the lowest total since the summer of 1975. It was the 16th consecutive monthly reduction.

The number of people classed as economically inactive, including those looking after a sick relative, on early retirement or who have given up looking for a job, also fell in the latest quarter - by 54,000 to reach 7.92 million. But the total is still 51,000 higher than a year ago.

Employment Minister Stephen Timms said: "These figures show we continue to have a strong and stable labour market with both record numbers in employment and the lowest claimant count for 32 years.

"Our welfare reform policies are improving the opportunities for people who have traditionally been the hardest to reach, helping them to make the move off benefits and into work."

John Philpott, chief economist at the Chartered Institute of Personnel and Development, said: "What is surprising is that the ONS figures show no sign whatsoever of the softening in demand for staff identified by various recent independent employer surveys.

"The apparent conundrum might be explained by the normal lag between turning points in economic activity and the eventual labour market fallout. Let's hope for the best - but don't be too surprised if things soon start to take a turn for the worse."