British unemployment hits five-year low

Analysts say a drop in wages growth in the UK will lessen the pressure on the Bank of England to begin raising its main interest rate.

Britain's unemployment has fallen to 6.6 per cent, the lowest rate for more than five years, according to official data that also reveals a drop in wages growth.

Unemployment in the February-April quarter dropped from a rate of 6.8 per cent during the three months to the end of March, the Office for National Statistics (ONS) said in a statement on Wednesday. That had also been a five-year low.

At 6.6 per cent, the rate was at its lowest level since December 2008.

The number of unemployed has meanwhile dropped to 2.16 million people, the ONS added on Wednesday.

"Despite all this good news on jobs, pay growth in the UK economy has slumped. Average weekly earnings excluding bonuses rose year-on-year in the three months to April 2014 by just 0.9 per cent," noted Rob Harbron, senior economist at the Centre for Economics and Business Research.

Analysts said the drop in wages growth would lessen the pressure on the Bank of England to begin raising its main interest rate, which has stood at a record-low 0.50 per cent for more than five years.

"While the unemployment rate is continuing to fall, there is still enough slack in the jobs market to prevent wage growth from picking up," said Samuel Tombs, at consultants Capital Economics.


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