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mpc: 8 A29 The lower overall projections for borrowing had not reflected a tightening of the Government's desired fiscal stance, which would only be reassessed in the next Budget. Projections for the structural deficit over the next three years had been little changed. The Treasury had published a separate document prior to the Pre-Budget Report assessing the outlook for trend output growth over the next five years. This had suggested that trend growth could be 2 ½% per annum compared with the 2 ¼% per annum assumed in recent Treasury fiscal forecasts. Nevertheless, the fiscal forecasts in the Pre-Budget Report had continued to assume trend growth of 2 ¼% per annum, as would those in the next Budget.

IV

The labour market

A30 According to the Labour Force Survey (LFS), there had been a sharp increase in employment of 110,000 (0.4%) in Q3, following growth of 0.2% in Q2. After making an adjustment for the difference in average hours worked by full and part-time staff, employment growth in full-time equivalent terms had been the strongest for more than a year. Total hours worked had risen by 0.3% during the quarter. The proportion of the working-age population in employment had risen slightly in Q3, but had remained below the spring 1990 peak. A31 CIPS survey measures of employment growth had been little changed in November. The surveys suggested that manufacturing employment had again remained stable, services employment had continued to rise moderately, and growth in construction sector employment had remained robust. A32 Unemployment had continued to fall in Q3, by 38,000 on the LFS measure and by 57,000 on the claimant count measure. Almost the entire fall in the LFS measure had been accounted for by a reduction in the number of short-term unemployed (those unemployed for fewer than six months). The pace of decline in claimant count unemployment had appeared to slow in the most recent data (the claimant count had fallen by 11,000 during September and October, compared with a total of 54,000 in the preceding two months). However, the ONS were reviewing the seasonal adjustment of these data.