Tuesday's latest snapshot of employment in the UK showed that the jobs market in Scotland remains relatively buoyant despite broader economic uncertainty.
Amid evidence that "terrified" investors are dumping UK stocks ahead of November's Budget, figures from the Office for National Statistics (ONS) revealed a 20,000 drop in the number of adults out of work in Scotland during the May to July period. That equated to an unemployment rate of 3.5%, lower than the 4.7% recorded across the UK as a whole.
On the other hand, the employment rate for Scotland was 74.5%, slightly below the UK rate of 75.2%. The discrepancy between employment and unemployment rates is down to those classed as "economically inactive" – neither in work nor seeking employment – who do not fall into either category.
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Ann Frances Cooney, employment expert and partner at law firm DWF, noted that seasonally-adjusted estimates for August indicated that median monthly pay for employees in Scotland was £2,599, an increase of 6.5% compared to a year earlier.
"The dual impact of rising inflation and increased employer national insurance contributions is amplifying the financial challenges for businesses, as employees seek pay rises to offset the rising cost of living," she said.
"Despite broader economic uncertainty, the labour market has remained relatively buoyant, reflecting a degree of underlying stability. However, the anticipated introduction of a wide-ranging package of new employment rights is likely to shape employer decision making in the coming months, as businesses assess the potential operational and compliance implications."
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At the UK level there are now 2.3 job seekers per vacancy. Wealth Club investment manager Nicholas Hyett described it as a stable but not particularly strong performance, and with "worrying signs" underneath.
"Vacancies have fallen by 10,000 in the quarter to August, a 38th consecutive fall, and is less than half the number of people currently claiming unemployment benefits," Ms Hyett said. "With the estimated number of work force jobs also falling, it looks like the UK economy is simply not creating enough jobs and that problem is slowly worsening.
The danger of economic conditions weakening further in the coming months adds to the pressures faced by Chancellor Rachel Reeves as she prepares for the Autumn Budget on November 26 amid widespread concern that further tax increases are inevitable.
Fresh data from the Bank of America’s global fund manager survey found that investors are pulling out of UK stocks at a pace not seen in more than two decades. River Global Investors fund manager Hugh Sergeant said investors "are currently terrified of this government, and particularly the next Budget".
