Scottish unemployment falls below UK Published duration 14 September 2016

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Unemployment in Scotland has fallen below the UK rate, according to the latest official figures.

The Office for National Statistics (ONS) said the rate in Scotland between May and July had fallen to 4.7%, with the UK as a whole at 4.9%.

The employment level rose 51,000 over the quarter to 2,631,000 - the largest quarterly rise on record.

The Scottish government said the figures underlined the importance of EU and single market membership.

Across the UK as a whole, the number of people without jobs and looking for work fell by 39,000 to 1.63 million

Average weekly earnings including bonuses increased by 2.3% on last year, down slightly from the previous report. The proportion of people in work hit a record high of 74.5%.

A closer look at the figures by BBC Scotland's business and economy editor Douglas Fraser

The latest numbers don't tell us much about the impact of the Brexit vote. It's too early for that.

The claimant count for August is one measure that is taken after the vote, and that has seen only limited change, so far.

The statistics return the Scottish jobs market to being in a slightly better position to that of the UK as a whole. So what's changed to make that possible?

The simple answer: no-one knows. I've been hearing from some who can make educated guesses. One suggests the weakening of the pound - which proceeded the Brexit vote - may has boosted tourism employment in May to July, both through more foreigners coming to Scotland and with more British people "staycationing".

Scotland has a relatively large tourist sector, and it's been doing fairly well of late.

Another economist points to underlying factors to do with inactivity rates - largely made up of family carers, the long-term ill, full-time students, early retirees and a much smaller number of so-called "discouraged".

Taken over a year in which the number seeking work went up by 33,000, the number counted as inactive went up by 30,000. Employment was up 17,000 in that period.

So this is not the simple model of people being unemployed, and then finding a job. It is more complex than that, with people moving from job search to economic inactivity and back, alongside a more modest uptick in the numbers in work.

Also, in RBS research published earlier this week, the increase in the "in work" category has largely comprised those in self-employment, taken over the past eight years.

That should not be read as a sign of confidence from business and recruiters. There are many reasons for going self-employed - positive ones, for good pay and flexibility, and through necessity, for lower and uncertain pay.

The ONS said the figures showed "continued labour market improvement".

Scotland saw the second-largest increase in the employment rate across the UK, behind only Wales.

'Encouraging figures'

In its employment and labour market report , the ONS said: "The large increase in Scotland is partially due to some estimates at the start of the year much lower than suggested by other recent figures, with the underlying pattern mostly flat."

The Scottish government said Scotland continued to outperform the UK on female and youth employment.

Keith Brown, the Cabinet Secretary for Economy, Jobs and Fair Work, said: "These encouraging figures continue to show that the fundamentals of the Scottish economy are strong, with a 51,000 rise in the employment level and a drop of just over 1 percentage point in the unemployment rate over the quarter, taking it below that of the UK average.

"While these figures are welcome, the Scottish government is absolutely committed to taking further action. Our Labour Market Strategy shows that there is still more that we can and will do."

Mr Brown said the government's planned £500m Scottish growth fund would further support the workforce and allow the economy to grow.

But he added that Brexit posed a "real and direct risk" to economic recovery in Scotland.

Skills review

The small business support organisation, FSB, said most Scottish firms had been "getting on with business" since the vote to leave the EU in June.

Andy Willox, the FSB's Scottish policy convenor, said: "While these figures are encouraging, smaller businesses and the self-employed still need support from governments in Edinburgh and London.

"The upcoming autumn statement will be a great opportunity for the new chancellor to show that he backs the UK's army of smaller firms.

"Further, the Scottish government's current enterprise and skills review must make agencies put the needs of small and growing businesses at their core."