UK Unemployment falls below 7%

The number of people out of work in the UK has fallen by 77,000 to a five-year low of 2.24m in the three months to February, official figures indicate.

The unemployment rate now stands at 6.9% of the adult working population according to the latest figures from the Office for National Statistics.

This means that the unemployment rate has fallen below the threshold at which the Bank of England said last August it would consider raising interest rates under its policy of forward guidance. However, this does not necessarily men there sill be an increase this month from the current historic low rate of 0.5%.

This news comes as it has also been reported that Average earnings in the three months to February grew 1.7% compared with a year earlier, while CPI inflation was recorded to have fallen to 1.6% in March. It is the first time since the spring of 2010 that the increase in average wages has exceeded the Consumer Price Index (CPI) measure of inflation.

It is also the first time since the recession that unemployment has fallen below 7%.

David Kern, chief economist at the British Chambers of Commerce, told the BBC that the latest ONS figures demonstrated the resilience and flexibility of the UK labour market.

But he added: "Concerns do persist, however. The youth unemployment rate is still much too high at 19.1% and, while long-term unemployment is falling, more than 800,000 people have been unemployed for more than a year.

"These concerns aside, it is clear that the recovery is on the right track. To consolidate this, it is important that we see measures to increase productivity and firmer action on youth and long-term unemployment.

"Improved access to finance, incentives to recruit apprentices, and support for export and investment will go some way to achieving this."

Comments

Jim said…
Seems good that unempoyment is falling. Though I must add i do tend to take unemployment figures with a pinch of salt. Lots of people are not "unemployed" but they are not emplyed by others or themselves either. People on training courses and things, basically a large number of people for several different reasons dont or cant work, but are not officially unemployed.

Much like the suicide attempt rate in guantanimo bay, basically the rate was way to high, so the DoD re defined what is a suicide attempt, and what is other "self harm" and instantly the suicide attempt rate plummeted.

Another classic example i keep banging on about is of course inflation, inflation was getting silly, so TPTB simply redefined inflation and lo and behold the inflation rate plummeted as well. Brilliant.
1:28 pm
Chris Whiteside said…
There is some justification for your being sceptical - in the proper sense of that word - about government statistics since administrations of every political colour changed the figures to get what they wanted in the past.

A change is only meaningful when comparing figures compiled on a consistent basis and issued or verified by an independent body.

Both the reduction in unemployment and that in inflation which I quoted for last month are sourced from the "Office for National Statistics" which is a lot more independent than the arrangements for measuring and publicising statistics used to be, and both represent improvements on a "like for like basis." You can make an argument about what the true level is, but the figures on any given basis really are improving.

Car tax did indeed go up by slightly more than inflation for both the two years you mention.
1:40 pm
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