United Kingdom unemployment dips to 4.5pc; new low since 1975


The ONS said employment climbed to around 32 million, a rise of 324,000 compared with previous year and the largest total since records began in 1971.

However, average weekly earnings adjusted for inflation fell by 0.5 percent, excluding bonuses, compared with a year earlier, the data showed.

Inflation in the United Kingdom economy has been pushed by the slump in the value of the pound Between March to May 2016 and March to May 2017 in real terms total pay for employees in Great Britain fell by 0.7%, the lowest growth rate since June to August 2014.

The rate for the United Kingdom as a whole now stands at 4.5%, according to the Office for National Statistics.

On the flipside, unemployment fell in the month, hitting a new low of 4.5%, down from 4.6% at the last reading.

Employment minister Damian Hinds said: "These latest statistics are another reminder that our strong economy is giving record numbers of people the chance to find and stay in work".

Pay remained subdued even though the latest three months saw healthy demand for labour.

"Ministers must set out a plan to get real wages rising across the public and the private sectors. And the minimum wage must be raised to £10 as quickly as possible".

GMB General Secretary Tim Roache said: "Yesterday, Matthew Taylor called for more quality jobs - well these figures show they just aren't there".

Soaring inflation triggered by the Brexit-hit pound has put household spending power under sustained pressure since the start of the year, causing disposable incomes to fall and the amount spent on credit cards to increase.

"Yet the number of people struggling to make ends meet despite being in work has also increased".

It has resulted in real terms wages going backwards for the first time since 2014 - when they emerged from a five-year period of decline following the financial crisis.

Ben Brettell, senior economist at Hargreaves Lansdown, said the squeeze on household finances continues: "Shrinking real pay doesn't bode well for economic growth - the United Kingdom economy is heavily reliant on the consumer and falling real incomes should eventually translate into lower retail sales".

The sluggish pay data may cause Bank of England officials to think again about the need to raise interest rates, after a narrow 5-3 vote by the Monetary Policy Committee (MPC) last month to leave rates at 0.25%.

The Bank's deputy governor Ben Broadbent said on Wednesday that he is "not ready" to raise interest rates due to too many "imponderables" in the economy.