Published: Fri, May 19, 2017
Economy | By Annette Adams

Jobless rate reaches 42-year low at 1.54 million

Jobless rate reaches 42-year low at 1.54 million

Average weekly earnings excluding bonuses grew by a lower than expected 2.1% in the three months to March, the Office for National Statistics said - down from 2.2%.

They reveal that the unemployment rate was at the lowest since 1975, falling from 5.1% past year to 4.6%, with 122,000 more people in work compared with the previous three months.

Alpesh Paleja, the CBI's principal economist, said: "Weakening productivity and slower pay growth, coupled with rising inflation, will continue to squeeze real household earnings".

On a month-on-month basis, the Headline index increased by 1.60 per cent in April 2017, 0.12 per cent points lower than the rate recorded in March.

It is the first fall since the third quarter of 2014. The jobless total fell by 53,000 to 1.54 million in the first three months of the year while the number in work rose by 122,000 to nearly 32 million, the highest total on record. The fall in real wages follows a spike in the cost of living after last year's post-referendum plunge in the value of the pound.

The unemployment rate fell to 4.6%, the lowest since 1975. Non-UK nationals represent 11.1 per cent of the workforceThe number of non-UK nationals working in the UK increased by 207,000 to a record 3.5 million in the first quarter, representing 11.1 per cent of the workforce. This is on top of rising clothing, vehicle tax, and electricity prices that affected overall consumer prices.

A survey of its regional agents added that companies were restricting pay rises to the 2.0-2.5 per cent range.

Another survey published earlier on Wednesday showed inflation gnawed further into the budgets of British households this month, resulting in the sharpest fall in cash available to spend in two-and-a-half years. Surge in employment growthDutch bank ING described the rise in employment as "astonishing". London's FTSE 100 inched up 0.02%, the benchmark Euro Stoxx 50 lost 0.30%, France's CAC 40 fell 0.39%, while Germany's DAX traded down 0.21%.

The Bank said in its inflation report last week that inflation would peak at 3 per cent later this year, as the pound's slump causes prices to rise. Wages are rising at a slower rate than the cost of living.

He said: "Yet again, the missing ingredient in all this is a strong recovery is wage growth".

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