UK unemployment rate dropped to 4.4% in June
The UK unemployment rate dropped to 4.4% in June, down from 4.9% a year earlier to the lowest rate since 1975, according to the Office for National Statistics.
There were 32.07 million people in work in the three months to June and 1.48 million people unemployed – down 157,000 over the last year.
Wages grew by 2.1% compared with the same period last year, the Office for National Statistics said, which was better than expected – economists that took part in a Reuters poll had forecast wage growth of 1.8 percent.
After adjusting for price inflation, total pay in real terms dropped by 0.5%, both including and excluding bonuses, compared with a year earlier.
“The employment picture remains strong, with a new record high employment rate and another fall in the unemployment rate. Despite the strong jobs picture, however, real earnings continue to decline,” said Office for National Statistics senior labour market statistician Matt Hughes.
Andrew Sentance, senior economic adviser at accountants PwC, was quoted by Reuters as saying:
“Though unemployment is at its lowest level since the mid-1970s, it would not be surprising to see the jobless rate edging up later this year in response to the current economic slowdown.”
The report also showed that there were 883,000 people on “zero-hours contracts” in their main job, 20,000 fewer than for a year earlier.
The jobs report comes after data showed inflation remained unchanged in July at 2.6%.
Howard Archer, chief economic adviser to the EY Item Club, was quoted by Sky News as saying: “Worryingly for consumers, higher employment is still not translating into higher pay.
“Anaemic earnings growth is a key factor arguing against any near-term Bank of England interest rate hike.”