Unemployment falls to 7.1%

22 Jan 14
The UK unemployment rate has dropped to 7.1%, close to the 7% that will prompt the Bank of England to review interest rates

Office for National Statistics figures, published today, showed that over the three months to November 2013 there had been a drop of 0.5 percentage points in the unemployment rate compared June-August.

There were 2.32 million unemployed people, down 167,000 from June to August and down 172,000 from a year earlier.

In forward guidance issued last year, Bank of England governor Mark Carney said interest rates would be kept at their current level of 0.5% until the headline rate of unemployment falls to 7%.

The Department for Work and Pensions hailed what it called the largest quarterly rise in employment since records began, noting that the number of people in work increase by over 280,000 over the three-month period.

Employment minister Esther McVey said: ‘Creating jobs and getting people into employment are central to our economic plan to build a stronger, more competitive economy, so it is very encouraging news that we’ve seen a record-breaking rise in employment over the last three months – the largest ever.

‘With the highest quarterly fall in unemployment since 1997, it’s clear that the government’s long-term economic plan to get people off benefits and into work so they can secure their future is proving successful.’

There was also positive news on youth unemployment, with the number of 16- to 24-year-olds in employment up 77,000, and the number out of work down 39,000. The number of young people claiming Jobseeker’s Allowance also fell for the 19th consecutive month.

Ian Brinkley, chief economist at the Work Foundation, said the figures showed that labour market recovery was picking up pace, with unemployment falling across all age groups.

But he added: ‘Living standards have not improved. Wage growth continues to lag behind inflation, and productivity is falling in both the manufacturing and service industries. Although the labour market recovery is welcome news, we urgently need to see this translate into rising wages and productivity.’


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