ClickAJob News

The proportion of people unemployed in the UK fell to 5.4 per cent in the three months to July, with the fall accompanied by a rise in average earnings.

New figures show that the number of people in employment over the three-month period was 29.1 million, the highest figure since comparable records began in 1971.

The number of people in work climbed by 84,000 over the previous quarter and was also up by 132,000 over the year, the data released by the Office for National Statistics (ONS) shows.

As such the number of unemployed people in the UK fell to 1.65 million over the three months to the end of July, having fallen by 28,000 on the previous quarter.

Figures show that the number of people claiming jobseeker's allowance also dropped for the 11th consecutive month in August. The claimant count stood at 852,900 last month, down 4,200 on July's figure and down by 100,400 over the year.

Welcoming the figures, employment minister Caroline Flint said: "Once again we have a strong set of labour market figures with record numbers in work.

"We have made real improvements since 1997 - reducing the number of people claiming unemployment benefit by almost half and seeing numbers on all main out of work benefits fall in total by around a million," she stressed.

Separate figures released by the ONS today also show that average earnings, including bonuses, rose by 3.5 per cent in the year to July – up from 3.4 per cent in June.

Officials attributed the rise to stronger wage growth in the manufacturing and private sector services sectors, which was only partially offset by a decrease in pay growth across the public sector.

However analysts said the data would do little to quell speculation that interest rates have peaked at 5.75 per cent, stressing that both headline and underlying earnings growth remain substantially below the level which is considered consistent with achieving the Bank of England's inflation target.

"Despite evidence of a further tightening in the labour market, there still appears to be sufficient slack to limit workers' bargaining power," said Global Insight chief economist Howard Archer.

"Meanwhile, elevated input costs and strong competition are maintaining pressure on companies to limit pay," he added.