UK unemployment continues to fall

The number of unemployed people in the UK fell by 18,000 from June to August, data from the Office for National Statistics (ONS) has revealed.

The employment rate now stands at 71.7 per cent of the economically active population, with 29.87 million people in work. This is up 155,000 from March to May.

Key figures from the ONS estimates for June-August:

  • 1.45 million employees and self-employed people are working part-time because they cannot find a full-time job
  • a third of part-time employees admit they cannot find a full-time job
  • the unemployment rate was 7.7 per cent of the population - down 0.1 per cent from the previous three months
  • there are 2.49 million people aged 16 and over out of work
  • regular pay increased by 0.8 per cent compared with June-August 2012.

The Bank of England's Monetary Policy Committee (MPC) said it will not raise the base rate of interest from 0.5 per cent until the unemployment rate falls to seven per cent.

David Kern, chief economist for the British Chambers of Commerce, said he expects unemployment to fall to seven per cent at least a year earlier than the MPC's Q3 2016 estimate.

"However it is regrettable that people in the financial markets are regarding this as a failure of the forward guidance policy," he said. "An economy with lower unemployment is good news, and businesses will benefit from a period of stability, even if this is shorter than initially thought."

The 0.8 per cent increase in regular pay is well below the rise in the consumer prices index measure of inflation, which grew by 2.7 per cent in the year to August 2013.

Prime Minister David Cameron told the UK press: "Of course, we all want to see living standards improve, and last year disposable income increased. But the way to deliver on living standards is to grow the economy, keep producing the jobs and cut people's taxes."