UK unemployment at lowest level for seven years

The UK unemployment rate fell to a seven-year low of 5.4 per cent in the three months to August, new figures have shown. It was the lowest jobless rate since the second quarter of 2008, the Office for National Statistics said.

There were 1.77 million unemployed people (people not in work, but seeking and available to work), 79,000 fewer than for March to May 2015 and 198,000 fewer than for a year earlier. Although 22.77 million people working full-time in the three months to August, up 291,000 compared with the same period last year.

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The unemployment rate fell to 5.4 per cent, lower than for March to May 2015 (5.6 per cent) and for a year earlier (6.0 per cent). It has not been lower since March to May 2008. The unemployment rate is the proportion of the labour force (those in work plus those unemployed) who were unemployed.

But in the West Midlands unemployment rose by 1,000 to 165,000.

The North East and Scotland were the only other areas of the country to see unemployment rise.

Mark Beatson, Chief Economist at the CIPD, the professional body for HR and people development, said: “Today’s statistics will be seen generally as good news, and rightly so. Employment has risen again to record levels, and the bulk of the jobs growth continues to be full-time and with employee status. However, it appears that the boom in self-employment we saw in the years after 2008 has stalled; the numbers reached their peak in spring last year and are starting to edge down.

“While the headline unemployment rate fell, there was a small increase in the jobless claimant count. This reminds us that the Government faces a significant challenge in delivering on its Welfare to Work. Youth unemployment still needs to come down further and long-term unemployment remains a problem, especially for older job-seekers.

Meanwhile, across the UK, the number of people in work increased by 140,000 in the same three months to 31 million, the highest since records began in 1971.

The Office for National Statistics said the fall in unemployment more than outstripped recent rises.

But the number of people claiming jobseeker’s allowance and the unemployment element of Universal Credit – the so-called claimant count – increased last month by 4,600 to 796,200.

Comparing June to August 2015 with a year earlier, pay for employees in Great Britain increased by 3.0 per cent including bonuses and by 2.8 per cent excluding bonuses.

 “As the Government puts its finishing touches to its Spending Review, it needs to avoid assuming this is a case of ‘job done.’ A growing labour market is a great help in tackling unemployment, but some jobseekers need dedicated support and encouragement if they are to be in a position to compete for the opportunities available.

“Average earnings are growing by 3 per cent a year in real terms, but there is still little sign of skill shortages that might push up wage growth across the board. With no inflation, this does mean that for now most people in employment will see an increase in living standards. However, we need this to happen for several years to make up for the fall in real average earnings we saw between 2009 and 2014. That will only happen if we see sustained productivity growth,” added Beatson. 

Mary.Isokariari

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