The UK unemployment rate fell to a five-year low in the first quarter, data from the Office for National Statistics showed Wednesday. The jobless rate declined to 6.8% during January to March, in line with expectations, from 7.2% in October to December. Average earnings pay including bonuses increased 1.7% in the first quarter from a year earlier. Excluding bonuses, average income advanced 1.3%. There were 1.12 million people claiming Jobseeker's Allowance in April, which was down 25,100 from March.
Jobless claims, a narrow measure of unemployment, was expected to fall by 30,000. The claimant count has fallen for 18 consecutive months, ONS said. The claimant count rate came in at 3.3% versus 3.4% in March. Partly due to more self-employed people, employment rose by 283,000 from the prior quarter to 30.43 million in January to March period.
Jeremy Cook, chief economist at the currency company, World First said: “We have seen the biggest quarterly improvement in employment since records began, in 1971, over the past 3 months. Unfortunately this has not come with a continued rise in ‘real wages’, with average earnings only rising by 1.7%, the same as last month.
However Cook added that the disappointment surrounding real wages outweighed any positive sentiment coming from the fall in the overall rate of unemployment to 6.8%.
“This lack of wage inflation will keep overall CPI lower in the short term and, more importantly, will allow the Bank of England to maintain low rate expectations into next year,” he said..
As a result of the news, the pound fell from 16 month highs against the euro.
