Unemployment Falls to 5 Year Low

Economic recovery is well under way if the jobs figures are any indication, growing well above expectations, although wage inflation is disappointing

Morningstar News Team 11 June, 2014 | 4:38PM
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The UK unemployment decreased to the lowest level in more than five years as companies raised their headcount as economic recovery gained momentum. The ILO unemployment rate eased to 6.6% in the three months to April from 7.2% during the November to January period, reported the Office for National Statistics.

The rate also dropped from the 7.8% during the same period of last year. The latest figure was the lowest since early 2009 and came in below the expected 6.7%. The Bank of England has pledged not to raise its key rate from the current 0.50% until the slack in the labour market is exhausted. Policymakers are now divided over the remaining amount of spare capacity.

Although employment is continuing to grow very rapidly, there still appears to be enough slack in the jobs market to prevent pay growth from picking up. Pay including bonuses increased 0.7% from last year, slower than the 1.9% rise seen in the three months to March. Likewise, earnings growth excluding bonuses slowed to 0.9% from 1.3%.

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