EMPLOYMENT in Scotland has reached a record high and joblessness a record low with more than three-quarters of working age adults now in a job.

New figures from the Office of National Statistics show Scotland had the highest employment rate of any part of the UK outside the south-east and south-west of England.

Between May and July, the employment rate rose 1.8 points to a record 75.8 per cent as an extra 49,000 people found work, taking the total to 2,587,000.

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The UK employment rate was fractionally lower, at 75.3 per cent.

In the same quarter, the unemployment rate fell to 3.8 per cent in Scotland, the joint lowest since 1975, down 7,000 to 102,000.

The Scottish rate was 0.5 points lower than the UK one of 4.3 per cent.

The Scots inactivity rate, which includes students and people not actively seeking work, and had been a growing concern, also fell 1.6 points, back into line with the UK at 21.2 per cent.

However wage growth continued to lag inflation, which hit 2.9 per cent in August, meaning an ongoing squeeze on wages, which affects spending power and the wider economy.

SNP employability minister Jamie Hepburn said: “These are the latest encouraging figures for Scotland’s economy and labour market.

“There are now 109,000 more people in employment compared to the pre-recession peak and Scotland now has the highest employment rate in the UK.

“Our unemployment rate remains a success story, showing that the labour market remains resilient and robust.”

Tory Scottish Secretary David Mundell added: “It is very encouraging that Scotland’s employment has reached a record high and that unemployment remains at a historic low. More people in work means more money in people’s pockets and that’s good news.

“However, we cannot afford to be complacent.

“With Scotland’s overall economic performance continuing to lag behind that of the UK, it is imperative our two governments work together. I also urge the Scottish Government to use their extensive powers to boost Scotland’s prosperity.”

The Scottish Chambers of Commerce said the unemployment rate was now “significantly” below the 5 to 6 per cent considered normal by economists.

Chief executive Liz Cameron said: “Scotland continues to set the pace for jobs growth and diminishing unemployment in the UK. Long may it continue.

“But we cannot be complacent about the UK or Scottish economy while real wage growth, stuck at 2.1 per cent, continues to lag inflation.

“The Bank of England predicts rising wage growth next year, but until that materialises and workers are more confident of their spending power, these positive employment figures will not produce the feel-good factor required to promote further growth.”

Stuart Mackinnon, of the Federation of Small Businesses in Scotland said one in eight Scots were now self-employed, and the numbers were increasing.

He said: “Low unemployment is great for Scotland and good for firms that serve our local communities. While we know that some firms are concerned about skills and labour shortages, that shouldn’t detract from what is good news for the country.”

Stuart McIntyre, of the respected economic thinktank the Fraser of Allander Institute, said the Scottish labour market appeared in ”good health” but the longer term outlook was mixed.

He said: “Earnings growth has been weak for some time, and with inflation at 2.9 per cent, family budgets will be feeling the squeeze."