Britainís employment levels are increasing at the highest rate in almost twenty years, leading economic organisation Markit has identified.
According to Markit, new recruits are currently being added to business workforces at a pace that has been seen since the end of the 1990ís, with the levels of employment in the private sector playing a significant part in this occurrence.
The British private sector alone created a monumental 150,000 jobs in the last quarter of 2013 and is now driving the decrease in the countryís unemployment rate, Markit added.
Chris Williamson, Markit’s chief economist, said: “Companies have responded to the recent upturn in demand by taking on staff at a rate not previously seen since the late-1990s in recent months.
“Growth of employment picked up again in December, but remained just shy of Octoberís record high, pushed upward by faster job creation in the service sector. Some easing in employment growth was seen in construction and a marginal weakening seen in manufacturing, though in all three cases the pace of hiring remained robust.
“Combined, the three surveys point to the private sector taking on an additional 150,000 staff in the fourth quarter. The sustained growth of hiring suggests that the rate of unemployment, which had already fallen to 7.4pc in the three months to October, is likely to have fallen further towards the end of the year.”
Mr Williamson also disclosed his belief that on current trajectory with private sector performance, the 7% unemployment threshold could be breached as early as spring this year.
The Bank of England had previously said that they would not consider increasing interest rates until that time that the unemployment rate dropped below 7% in the country, which was originally forecasted to be sometime in late 2016.
However, recent growth statistics and a rapid decline in unemployment has led many to believe that it will happen earlier, with Mr Williamson being one such advocate.
He said: “At this rate of job creation, the jobless rate will have reached the Bank of Englandís threshold of 7pc for considering higher interest rates by early 2014.”
Other economic commentators backed his view.
This notion has also been argued by Howard Archer, chief Economist at IHS Global Insight, who pointed out that the private sector had been improving at a hastening rate in every month throughout 2013.
Mr Archer said: “Employment in the sector rose for a 12th month running in December and at the second-fastest rate after October since December 2006. This will likely fuel market expectations that the unemployment rate will get down to 7pc in the first half of 2014, and maintain suspicions that the Bank of England could start raising interest rates before the end of 2014.”
Recent reports have highlighted that the levels of growth in the UK stagnated in the last month of 2013, but Mr Archer said that the levels that we are at now are still vastly higher than was expected just two years ago.
Jeremy Cook, head economist at World First acknowledged that the UKís economic growth did stall in the latter stages of last year, but identified that a repeat performance within the private sector during 2014 would leave the country in good standing come next year.
Mr Cook said: ìEncouragement can be found within the release from the new orders and employment components, which both expanded at close to record levels and point to a continued level of service sector expansion.