Unemployment has fallen to 1.49 million in the three months to May, it was confirmed this morning.
The fall by 0.2 per cent means that joblessness is now at its lowest level since 1975 – when Harold Wilson was Prime Minister, Arthur Ashe was wowing crowds at Wimbledon and Britain held its first referendum on the question of Europe.
The latest figures show that just 4.5 per cent are currently out of work.
But despite the good news from the Office for National Statistics (ONS), there are lingering concerns that wage increases continue to fall further behind the rate of inflation.
If bonuses are excluded, average earnings increased by two per cent year-on-year, compared with current inflation of 2.9 per cent.
This means that real weekly wages have effectively fallen compared with 12 months ago.
Matt Hughes, senior statistician at the ONS, said: “Despite the strong jobs picture… there has been another real-terms fall in total earnings, with the growth in weekly wages low and inflation still rising
“The general picture is little changed on last month, with the overall employment rate and that for women both at record highs, the inactivity rate at a joint record low and the unemployment rate falling to its lowest since early summer 1975.”
The pay problem may pile further pressure on Bank of England officials to consider increasing interest rates from their current level of 0.25 per cent.
Paul Hollingsworth, UK economist at Capital Economics, said: “The continued weakness of wage growth provides some ammunition to the more dovish members of the Monetary Policy Committee (MPC) that now is not the time to raise interest rates.”
