The UK job market continues to surprise – and in a good way. Despite all the uncertainties about Brexit and the threat of a global turndown, the economy is still creating more jobs and sharply increasing pay levels. Employment as a percentage of the people of working age is equal to the highest ever. Unemployment is down to 3.8 per cent, the lowest since 1974. And pay is up 4 per cent year-on-year, the sharpest increase since 2007.

There is a short-term puzzle here and let’s try and unpick that. But there is also a longer-term pointer to the ways in which employment will develop in the years ahead, not just in the UK but across the developed world. The puzzle first.

The job market ought not to be so strong. It is not just that growth is slow, probably between 1 per cent and 1.5 per cent a year, though in the second quarter it was actually negative. From a business perspective the uncertainties are self-evidently huge, and taking on new staff involves a risk. If demand falls you may have to lay them off, which is expensive and, for any decent employer, distressing.

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