Published: Fri, May 19, 2017
Global Media | By Meredith Barber

British employment reaches record high as unemployment falls to lowest since 1975


The jobless total fell by 53,000 to 1.54 million in the quarter to March, a rate of 4.6 per cent, the lowest since summer 1975.

"Having hovered close to zero back in 2015, inflation has really picked up in 2017, doubling in the last six months alone and now at its highest level for nearly four years", said Matt Whittaker, chief economist at the Resolution Foundation.

He added: "Wage data are due later this week and are expected to show that real wage growth has turned negative in the first months of 2017".

Nick Dixon, investment director at Aegon, said: "Inflation has topped the Bank of England's 2% target for the third month in a row, putting yet more pressure on policy makers to pull the lever on interest rates".

Last week, the Bank of England warned that inflation as measured by the Consumer Prices Index (CPI) would peak at just below 3% this year.

Airfares climbed 12.8 per cent in the month from February, but overseas accommodation costs fell 9.2 per cent, as the transport and foreign travel sector saw a 1.9 per cent increase in prices in March. "If the disparity between pay and price growth continues to increase as we predict, household spending is likely to slow further, weakening overall economic activity".

The rising rate of inflation and CPI will cause a squeeze on pay, the growth of which is expected to remain at a muted 1% over the year to come.

According to a statement of Malaysian Statistics Department, transportation, food and non-alcoholic beverages which surged 16.7 percent and 4.1 percent year-on-year, respectively, were the two major contributors to the inflation.

"For the first three weeks of May, we estimate fuel price to be lower by 4 percent m/m but still 23 percent y/y higher compared with the preceding year".

With Theresa May's snap election just three weeks away, the figures show the real-term squeeze on millions of workers intensifying as inflation races ahead of average earnings, which are growing at just 2.2% a year.

Retirement income specialist, Retirement Advantage, estimates this increase in inflation will leave United Kingdom households needing to find an additional £20.2 billion to maintain their living standards.

Official figures show the United Kingdom unemployment rate has managed to fall to 4.6 per cent.

The retail price index, which is no longer used as an official measure of inflation but is used for some inflation-linked bonds, increased to 3.5 per cent from 3.1 per cent.

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