- REUTERS/Neil Hall
LONDON – UK unemployment fell to its lowest level since 1975, according to data from the Office of National Statistics.
The unemployment rate fell to 4.3% in the three months to July, down from 4.4% in the previous quarter and 4.9% a year earlier.
The employment rate, which measures the proportion of people aged 16-64 in work, hit 75.3% – the highest since comparable records began in 1971.
In total, there are 32.1 million people at work in the UK, according to the figures, or 181,000 more than the previous quarter.
“Another record high employment rate and a record low inactivity rate suggest the labour market continues to be strong,” Matt Hughes, a senior statistician at the ONS said.
“In particular, the number of people aged 16 to 64 not in the labour force because they are looking after family or home is the lowest since records began, at less than 2.1 million.”
Here’s the ONS’ chart of unemployment over the longer term:
And here’s the picture for overall employment:
Alongside the unemployment numbers, the ONS also said that wage growth was unchanged at 2.1%, as the UK’s pay squeeze deepens. Real wage growth is falling, after inflation came in at 2.9%.
“Despite earnings rising by 2.1 per cent in cash terms over the last year, the real value of people’s earnings is down 0.4 per cent,” Hughes said.
Here’s the chart:
The numbers will likely give the Bank of England’s Monetary Policy Committee – which holds its September meeting on Wednesday, and will announce its policy decisions on Thursday – something of a headache, Rhys Herbert, a senior economist at Lloyds Bank said after the data’s release.
“Today’s labour market data showed the now familiar combination of a seemingly tight labour market alongside still subdued earnings growth.”
“The data leaves Bank of England interest rate setters with a dilemma going into tomorrow’s latest policy announcement. With headline inflation well above its target but domestic inflationary pressures seemingly still under control, most MPC members will probably content themselves for now with sounding some notes of caution rather than hiking interest rates.”