Against the backdrop of rising uncertainty about Brexit and concerns about a slowdown in global economic growth, Britain’s labour market remains surprisingly robust. The proportion of working-age people in employment has hit a new record of 76.1% in the three months to January, while unemployment fell yet again to a new 44-year low of 3.9%. On the recruitment front line, this situation is forcing many employers to ramp up salaries to attract and retain staff. As a result, after years of stagnation, average nominal pay excluding bonuses is rising at a respectable rate of 3.4% year on year.

It is not all good news, however. While pay continues to rise steadily for the time being, the average worker may notice little difference to their buying power: weekly earnings are up £8 compared with a year ago, after adjusting for inflation, and remain below the pre-crisis peak. And although strong employment growth is certainly good news for people searching for a job, the outlook for the labour market remains uncertain. In the short term, the impact of political turmoil in the run-up to Brexit on business confidence, investment and hiring plans remain a key item to watch.