The UK unemployment rate remained at the lowest level in 43 years in the three months to August, helping the average earnings to increase further amid fears of no-deal Brexit, the Office for National Statistics said Tuesday.
The ILO jobless rate came in at 4 percent, in line with expectations, and was the lowest since February 1975. The number of unemployed decreased 47,000 from the previous quarter to 1.36 million.
At the same time, the employment rate stood at 75.5 percent compared to 75.7 percent in the three months to May.
Average weekly earnings excluding bonuses advanced 3.1 percent annually, the highest since late 2008. At the same time, including bonuses, earnings gained 2.7 percent, compared to the expected growth of 2.8 percent.
Today’s increase in wage growth supports the assessment that real wage growth is set to accelerate over the next year which should lift consumer spending and feed through into a pick-up in GDP growth in 2019, Thomas Pugh, an economist at Capital Economics, said.
Given that wage growth has been central to the Bank of England’s rate hike rationale, this trend is likely to keep them on their tightening track, James Smith, an ING economist, said.
“Despite the better wage growth figures – that might otherwise see the Bank of England accelerate its tightening plans – we don’t expect policymakers to raise interest rates until May 2019 at the earliest,” Smith noted.
In September, the claimant count rate held steady at 2.6 percent, data showed. The number of people claiming unemployment benefits rose by 18,500 from August.