UK unemployment drops to 43-year low but wage growth pulls back
Separate figures showed a record drop in the number of people on a zero-hours contract in their main job, who work with no guarantee of hours from week to week
London — UK unemployment dropped to a new 43-year low in the three months to the end of June but the pace of wage growth eased. The jobless rate stood at 4%, the lowest since February 1975, the UK’s Office for National Statistics (ONS) said on Tuesday. Economists had expected it to stay at 4.2%. The decline helps explain why the Bank of England (BOE) increased interest rates this month. Policymakers believe inflationary pressures are building in the labour market as skill shortages force employers to raise wages to attract and retain staff. Yet the absence of stronger pay growth so far also raises questions about whether the central bank committee’s unexpected unanimous decision was justified. There was little sign of overall wages surging in the latest data — the rate slowed to a nine-month low of 2.4% between April and June — but the BOE sees a pickup toward 3.5%.
For policy, much also depends on productivity. Without a significant improvement, firms may find their profit ma...
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