Eurozone employment grew at a marginally lower rate of 0.4 per cent in the second quarter, following a 0.5 per cent rise in the first quarter. Year-on-year employment growth stabilised at 1.6 per cent.

In quarter 2, there were 155.6 million employed in the eurozone, the highest level on record. Employment in the EU28 countries rose by 0.4 per cent on quarter and rose by 1.5 per cent annually. Malta, Spain, Greece and Poland registered the highest rises in employment compared with the prior period, while declines in employment were reported in Croatia, Latvia, Romania and Estonia.

The August Producer Manufacturing Index results showed that employment growth eased but remained the best recorded in the past decade, suggesting eurozone unemployment will continue to decline.

The Bank of England retained its interest rates at record low of 0.25 per cent and the quantitative easing programme at a maximum of £435 billion. The bank signalled an interest rate hike in the coming months to bring inflation back to target if the economy and price pressures kept growing. The Monetary Policy Committee (MPC) said: “All MPC members continued to judge that, if the economy were to follow a path broadly consistent with the August Inflation Report central projection, then monetary policy could need to be tightened by a somewhat greater extent over the forecast period than current market expectations.”

Data released this week showed that the UK unemployment rate fell to its lowest level in 42 years. Despite weak economic activity, employment growth remains strong, while earnings growth remained slow. The Office for National Statistics said that the jobless rate fell to 4.3 per cent, the lowest rate since 1975.

Analysts had anticipated the rate to remain unchanged at 4.4 per cent. Unemployment fell by 75,000 from the three months to April, to a 12-year low of 1.46 million between May and July.

The number of people in employment rose by 181,000 in the three months to July to a record 32.136 million, pushing the employment rate up to at an all-time high of 75.3 per cent.

This report was compiled by Bank of Valletta for general information purposes only.

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