Tuesday, October 26

Jobless Rate Falls And Wage Rises Accelerate


 

 

Official figures show the UK’s jobless rate has fallen to its lowest level in seven years and wage growth is accelerating.

The Office for National Statistics reported a fall of 35,000 in the number of people out of work in the three months to March, leaving the total at 1.83 million and the unemployment rate at 5.5% – down from 5.6%.

The rate, the ONS said, was now at its lowest level since May-July 2008 but the 35,000 decline in the jobless total was the smallest for almost two years.

Employment rose by 202,000 over the three-month period to more than 31 million, the highest since records began in 1971.

On the issue of pay, average earnings excluding bonus payments increased by 2.2% in the year to March, up by 0.2% on the previous month.

Pay rises are boosting spending power in the economy as they are currently easily outstripping inflation, which currently stands at zero.

The UK’s jobless rate of 5.5% is the second lowest in the European Union after Germany, and compares with the highest rates of 25% in Greece and 23% in Spain.

The number of people claiming jobseeker’s allowance fell by 12,600 in April to 763,000, the 30th consecutive monthly reduction.

However, those working part-time because they could not find a full-time job increased by 8,000 in the latest quarter to 1.32 million.

Jobs and wages dominated debate on the economy ahead of the General Election, with the Conservatives benefiting from a recovery in employment that began in 2012.

Commenting on the figures, chief economist at payments company World First, Jeremy Cook, said: “Despite poor business surveys from the construction and manufacturing industries last week, jobs continue to be added in these sectors, but it is the increase in wages that’s crucial for the UK economy moving forward.

“We have long called real wage increases a ‘silver bullet’ for the UK recovery.

“Real wage increases come from optimistic employers happy with business conditions and allow consumers to re-balance spending figures from credit uptake and promote growth in generalised output with a central bank more comfortable to normalise monetary policy.”