A DIP in the region’s employment rate is due mainly to the increased presence of the economically inactive, say business experts.

Commenting on the latest unemployment figures released last week by the Office for National Statistics, Ian Larrard, director of Business West’s Swindon and Wiltshire Initiative, said that the 1.5 per cent drop in the employment rate in the South West was “not surprising”.

He said: “At a regional level, a 1.5 per cent drop in the employment rate reflects an increase in the economically inactive, such as students and retirees, across the whole South West region, which includes Devon and Cornwall.”

The ONS figures show that unemployment across the region remained unchanged on the previous quarter at 3.6 per cent, or 101,000.

Employment in the region fell by 21,000 to 77.7%

However, it is thought that a drop of 1.5 per cent in the South West’s employment rate could suggest that the region’s job-generating capacity is beginning to be stretched.

TUC general secretary Frances O'Grady said: "Britain desperately needs a pay rise. Working people are earning less today (in real terms) than a decade ago.

"The chancellor must help struggling families when he gives his Budget next month. This means ditching the artificial pay restrictions on nurses, midwives and other public sector workers. And investing in jobs that people can live on."

But Mr Larrard stressed that the future looks bright for Swindon, and the South West region as a whole.

He said: “Nationally, unemployment levels are some of the lowest we have seen for decades, and Swindon and Wiltshire reflects the national picture.

“At a sub-regional level, we know from experience that employers in Swindon & Wiltshire are still investing and still hiring.

“Although uncertainty has become something of a watchword for business and the economy of late, Swindon and Wiltshire remain great places to hire and do business.”