The UK’s unemployment rate fell to 7.4 per cent in the three months to October, taking it to its lowest level since the February to April period in 2009, according to figures from the Office for National Statistics (ONS).
The rate fell from 7.6 per cent in the three months to September, surprising analysts, as well as nearing the Bank of England’s 7 per cent threshold for considering a rise in interest rates far sooner than expected.
The number of people out of work fell by 99,000 to 2.39 million over the period, while the number of people claiming Jobseeker’s Allowance in November fell by 36,70 to 1.27 million. In addition, the number of people aged 16 or over who are in work was up 250,000 to 30.09 million compared with the period between May and July.
Meanwhile, average weekly earnings growth, including bonuses, rose by 0.9 per cent in the three months to October on a year-on-year basis, making it a slight improvement on the three months to September. Excluding bonuses, pay grew by 0.8 per cent.
Even though the economic recovery appears to be getting stronger with each passing quarter, Bank of England Governor, Mark Carney, has stressed that unemployment hitting 7 per cent would not be an automatic trigger for a rise in interest rates and that the recovery needs to deepen before stimulus can be rolled back.
Minutes published today (December 18) from the Bank’s last rate-setting meeting showed that members of the Monetary Policy Committee (MPC) felt that the 2 per cent appreciation in Sterling over the previous month reflected a stronger economic outlook. However, it also warned that a stronger pound could jeopardise British exports.