Unemployment Falls But Wage Growth Slows

Savers and borrowers alike looked to today's jobs figure as an indication of whether to expect interest rates hikes soon, but slow wage growth has bought more time

Morningstar News Team 16 July, 2014 | 2:50PM
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The UK unemployment rate declined to the lowest since 2008 as employment hit record high, but earnings growth remained weak squeezing consumers' purchasing power.

The jobless rate for March to May fell to 6.5% of workforce, the lowest since the last quarter of 2008, reported the Office for National Statistics. The rate was in line with economists' expectations.

“With the Monetary Policy Committee linking interest rate prospects to its estimates of the amount of economic slack, and tying its view on spare capacity to conditions in the labour market, figures on the labour market are closely watched by markets and policymakers,” said Investec Bank’s Philip Shaw.

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