Unemployment levels in the United Kingdom fell again in the third quarter matching their lowest level in six years as it fell by 63,000 in the three months to October.
According to the Office of National Statistics, the jobless rate was at 6% which is great news for the economy when coupled with the news that, on a quarterly basis, average earnings excluding bonuses grew by 1.6% and including bonuses they rose by 1.4%.
This signifies a continuation of the fact that earnings growth has overtaken the rate of inflation after the last quarter proved to be the first time in five years that this had happened. This was hailed as a “major moment in the British recovery” by Chancellor of the Exchequer, George Osborne who went on to say:
“Not only do we have jobs being created and unemployment falling, but wages are now rising significantly above inflation. If we want this to continue at a time when there are many risks to the global economy, we’ve got to go on working through our long term economic plan.”
Current figures show that the United Kingdom’s current rate of inflation sits at a twelve year low at just 1%.
Howard Archer, economist at IHS Global Insight, said of these figures:
“Earnings growth is finally starting to open a clear positive gap over inflation, which is serious good news for consumers. This bodes well for consumer spending in 2015, although it needs to be borne in mind that consumers have faced a prolonged squeeze on their purchasing power. Meanwhile, the labour market is still seeing decent improvement, although the underlying rate of improvement is showing signs of moderation.”
Whilst Prime Minister David Cameron said of the situation:
“Employment is at a record high & average earnings are rising faster than inflation. More to do, but our long term economic plan is working.”
Figures show that 30.8 million people were in work over that three month period which is 115,000 more than the May to July period earlier in the year, however, the fall was the slowest quarterly drop in a year which some analysts have suggested that the rate of improvement may be close to peaking or even already have peaked.
The number of people claiming Jobseekers Allowance also fell in November with a drop of 26,900 to a level of 900,100. The overall number of unemployed currently sits a 1.96 million but as Rachel Reeves, the shadow secretary for work and pensions, pointed out:
“Long-term youth unemployment has risen over the last few months. So there’s still much more that the government needs to do.”
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