The UK’s labour market has withstood the early effects of the credit squeeze, judging by data showing a jump in employment, stable earnings growth and a continued drop in benefits claimants.

The Office for National Statistics said on Wednesday that the number of people in employment rose by 175,000 in the three months to November, the fastest increase in 11 years. Average earnings growth was stronger than expected, remaining flat at 4 per cent including bonuses and 3.6 per cent excluding bonuses.