UK unemployment rate falls to lower level since mid-2008

The UK’s unemployment rate fell unexpectedly in August to reach its lowest level since mid-2008, data released on Wednesday showed.

According to the Office for National Statistics, the unemployment rate fell to 5.4% between June and August, compared with a 5.5% figure in the previous quarter and analysts’ expectations for an unchanged reading.

The number of people in work climbed 140,000 to 31.1m in the last three months, in line with analysts’ forecasts, while unemployment declined 79,000 to 1.77m.

However, claims for jobless benefits rose for a second consecutive month in September, climbing 4,600 from the 1,200 gain recorded in August and against analysts’ expectations for a 2,200 decline.

The claimant count rate, meanwhile, held steady at 2.3% as expected.

Including bonuses, pay growth rose 3% year-on-year in the quarter to August, marginally ahead of the previous month’s 2.9% gain but slightly short of analysts’ expectations for a 3.1% increase.

Weekly pay growth excluding bonuses slowed down from 2.9% to 2.8% over the same period, falling short of consensus for a 3% reading.

“Today’s fall in unemployment has more than outstripped the recent rises, leaving unemployment at its lowest level since mid-2008,” said ONS labour market statistician, Nick Palmer.

“Meanwhile, employment continues to grow with the employment rate now at its highest since records began in 1971.

“Wages continued to grow strongly in real terms.”