Employment at record high, but inflation hits wages

UK unemployment rate hits historic low as wages grow more than expected

But the figures on wage growth showed the challenge facing Prime Minister Theresa May and her government, with households feeling the strain of rising prices since last year's Brexit vote.

The ONS also revealed today that United Kingdom unemployment hit its lowest level in 42 years but average earnings continued to lag behind earnings in Q2.

Today's official figures also showed the employment rate between April to June this year reached 75.1% - the highest since 1971.

Unemployment is also at a 42-year low with the rate of unemployment dropping to 4.4 per cent in the three months to June, the lowest level since 1975.

However, 15 per cent of unemployed people were migrants from outside Europe - 219,000 - people, while fewer than 100,000 EU-born workers were unemployed, 98,000, or 6.7 per cent of all unemployed people.




Meanwhile, average weekly earnings rose by 2.1% year-on-year, beating expectations for a 1.8% reading and higher than the upwardly revised 1.9% gain recorded in the previous month.

It means 32.07 million people are now in work across the United Kingdom with an employment rate of 75.1 per cent, the highest rate since comparable records began in 1971.

There were 32.07 million people in work, 125,000 more than for January to March 2017 and 338,000 more than for the same three months year earlier. Annual inflation in Britain was 2.6% in July, well in excess of the BOE's 2% target.

However, real pay fell by half a per cent after inflation was taken into account. "Though unemployment is at its lowest level since the mid-1970s, it would not be surprising to see the jobless rate edging up later this year in response to the current economic slowdown", PwC's senior economic adviser Andrew Sentance said.

"The proportion of people aged from 16 to 64 in work is known as the employment rate... The Bank of England has pointed out that uncertainty over the economic outlook may be affecting companies' willingness to raise pay - it expects regular pay growth to remain subdued for the rest of 2017".

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