Median monthly pay for payrolled employees also saw a substantial rise, reaching £2,389, marking a 6.3% increase over the previous year, outpacing the UK’s growth rate of 5.6%.

Taking a closer look at the statistics, Ann Frances Cooney, employment partner at DWF in Edinburgh, said: “The Scottish labour market figures for the period December 2023 to February 2024 indicate that over the quarter the unemployment rate decreased, while the employment rate increased and the inactivity rate decreased.”

However, Ms Frances Cooney noted that although unemployment was down and Scotland’s employment rate grew to 74.2%, “up 0.5% over the quarter”, this figure is under UK’s average of 74.5%.

Ms Frances Cooney continued: “The economic inactivity rate in Scotland was 22.6%, down 0.2% over the quarter. Scotland’s economic inactivity rate was above the UK rate of 22.2%.”

Discussing the increase in pay, she said: “Employers are doing their best to meet the demands for higher pay, only too aware that employees are prepared to move jobs for higher salaries.

“We can expect further change in the labour market over the course of the year with a general election around the corner. For example, Labour has set out plans to introduce unfair dismissal as a day one right.

“Should Labour win the election and introduce this right, employees may be more willing to move employment knowing that they have a basic level of protection against dismissal.”