Britain’s unemployment rate hits new 42-year low

LONDON: Britain’s unemployment rate has fallen to a new 42-year low, official data showed on Wednesday, but wages growth remains far below overall inflation. The unemployment rate fell to 4.3 per cent in the quarter through to the end of July, reaching the lowest level since 1975, the Office for National Statistics (ONS) said in a statement.
It had stood at 4.4 per cent in the three months to June.
Employment reached a new record high of 32.1 million workers, as the number of people in jobs increased by 181,000 in the three months to July 2017.
A total of 1.46 million people were recorded unemployed at the end of July, down 175,000 on a year earlier.
But growth in wages continue to lag behind Britain’s annual inflation rate, which ONS statistics Tuesday showed had jumped to 2.9 per cent in August from 2.6 per cent in July. Average weekly earnings rose by 2.1 per cent year-on-year in the three-month period to July, below the Bloomberg consensus estimate of 2.3 per cent.
The combination of rising inflation and stagnating wage growth meant that real wages fell by 0.4 per cent, further reducing purchasing power in the UK.
“Job creation is a huge UK success story,” said Ian Stewart, chief economist at Deloitte. “Despite Brexit uncertainties and slower growth, the UK continues to generate ever lower unemployment and ever more jobs.”
Despite the strong jobs growth, there is concern that weak wages growth is starting to hurt consumption, reducing the chances of interest rate tightening from the Bank of England that would give a lift to savers. — AFP