Jobless Rate Nears Six-Year Low And Wages Rise

Official figures show the UK's jobless rate has fallen to its lowest level for six years, with wage rises starting to pick up.

The Office for National Statistics (ONS) said the rate fell to 6.2% in the three months to July - more than was expected by economists - for the first time since September-November 2008.

The number of people claiming Jobseeker's Allowance fell in August for the 22nd-consecutive month - by 37,200 - to 966,500.

It meant the total had dropped below one million for the first time since September 2008.

The trend of employment growth continued with an increase of 74,000 to 30.6m recorded between May and July.

Scotland's unemployment rate was better than the UK average

It left the unemployment total at 2.02m, the ONS said, with the economy producing the largest annual fall in unemployment since 1988.

While pay growth continued to lag inflation in the period, there was an improvement in average weekly pay increases.

The ONS measured pay, including bonuses, rising 0.6% in the year to July from an annual decline of 0.1% the previous month.

The wage reduction was explained last month as being a result of companies delaying bonus awards last year to help their employees benefit from a cut in income tax.

The Bank of England has put pay at the centre of its thinking on when to raise the base rate of interest from its record low of 0.5%.

It has also emerged that two members of its Monetary Policy Committee continued to support a rate increase this month in a 7-2 vote despite official figures highlighting weak wage growth.

Martin Weale and Ian McCafferty argued for the second-consecutive month that the Bank needed to act now in order to pre-empt wage and inflationary pressures further ahead.

The Bank last month halved its forecast for average wage growth last month, saying it now expected average salaries to rise by just 1.25% this year.

The Chancellor had the Scottish independence referendum on his mind when he tweeted his reaction to the jobless numbers.

George Osborne said: "Today's employment stats mark another step towards full employment. But still much more to do."

He added that unemployment in Scotland was down to 6%, below the UK average.

Stephen Timms, Labour’s shadow employment minister, said: "Today's fall in overall unemployment is welcome, but the new figures have shown working people are seeing their pay falling far behind the cost of living.

"A Labour government will freeze gas and electricity bills, raise the minimum wage and get more homes built to tackle the cost-of-living crisis".