UK unemployment falls by 63,000 as earnings growth picks up

The number of unemployed people in the UK declined by 63,000 between August and October to 1.96m, according to data from the Office for National Statistics (ONS) on Wednesday.

This was smallest quarterly fall in joblessness in over a year since July-September 2013, the ONS said.

Nevertheless, the jobless rate declined to 6%, from 6.2% between May and July and down from 7.4% a year earlier.

However, analysts were keen to highlight the 1.4% year-on-year increase in weekly earnings, compared with growth of just 1% the previous three months and the actual rate of UK consumer-price inflation, which fell to just 1% in November.

“Earnings growth is finally starting to open a clear positive gap over inflation, which is serious good news for consumers,” said economist Howard Archer from IHS Global Insight.

“While real earnings growth is currently still limited, its prospects are looking increasingly bright given likely extended very low inflation as well as a seemingly gradually developing uptrend in earnings growth.”

Average regular pay excluding bonuses for employees in the UK came to £456 per week before tax and other deductions in the three months to October.

Respected economic research group the EY Item Club said: “Momentum in the jobs market continues to show signs of cooling. At the same time the picture for underlying pay growth, although flattered by the rise in minimum wage, still looks weak against a relatively low jobless rate and continued growth in the number of those in work."

There were a total of 30.8m people in work during the August-October period, up 115,000 on the preceding three months and 588,000 more than the same period in 2013.