Bri­tish un­em­ploy­ment hits new 42-year low

Kuwait Times - - BUSINESS -

Bri­tain’s un­em­ploy­ment rate has fallen to a new 42-year low, of­fi­cial data showed yes­ter­day, but wages growth re­mains far be­low over­all in­fla­tion. The un­em­ploy­ment rate fell to 4.3 per­cent 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 per­cent 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 per­cent in Au­gust from 2.6 per­cent in July. Av­er­age weekly earn­ings rose by 2.1 per­cent year-on-year in the three-month pe­riod to July, be­low the Bloomberg con­sen­sus es­ti­mate of 2.3 per­cent. The com­bi­na­tion of ris­ing in­fla­tion and stag­nat­ing wage growth meant that real wages fell by 0.4 per­cent, 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. The govern­ment on Tues­day sig­nalled its in­ten­tion to raise salaries for all pub­lic sec­tor work­ers by more than a 1.0per­cent cap in place dur­ing sev­eral years of state aus­ter­ity.

The first to ben­e­fit are po­lice of­fi­cers, who will see their pay in­crease by 2.0 per­cent, and prison of­fi­cers, who are re­ceiv­ing a 1.7-per­cent hike. But the POA prison of­fi­cer union branded the move a pay cut in real terms, re­flect­ing a wider frus­tra­tion at loss of pur­chas­ing power in the UK. —AFP

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