'The gap has narrowed': UK unemployment is close to a record low -- and wage growth is finally picking up

  • UK unemployment rate stays at joint record low of 4.3%, with 26,000 fewer people out of work.
  • However, employment numbers fall – 56,000 fewer people in work than in the previous data period, the ONS says.
  • Average earnings increase by 2.5% including bonuses – remaining below inflation.

LONDON – UK unemployment remains at its joint lowest level since 1975, while wage growth is beginning to pick up, according to the latest data from the Office of National Statistics.

The unemployment rate was 4.3% in the three months to October, unchanged from the previous reading.

While the headline rate didn’t change, unemployment did fall in the three months to October, with 26,000 fewer people out of work.

The employment rate, which measures the proportion of people aged 16-64 in work, hit 75.1% – up from 75% at the last reading

In total, there are 32.08 million people at work in the UK, according to the figures, 56,000 fewer than for May to July 2017.

The average weekly earnings for UK workers increased by 2.5% including bonuses and by 2.3% excluding bonuses, both better than forecast prior to the release.

Here’s the chart showing the longer term trend of wage growth:

Screen Shot 2017 12 13 at 09.41.10ONS

Wednesday’s unemployment data comes 24 hours after ONS data showed that inflation rose to its highest level in almost six years last month.

The UK’s Consumer Prices Index (CPI) inflation rate – the key measure of inflation – was 3.1% in November, up from 3% in October, reaching its highest level since March 2012.

That means that while earnings growth may be picking up, it is still lagging inflation and UK workers are seeing their real wages continuing to decline.

“Employment stayed close to its record high and while up on a year ago, declined compared with the previous three months,” senior ONS statistician Matt Hughes said in a statement accompanying the release.

“Unemployment also fell, but there was a rise in the number of people who were neither working nor looking for a job. Meanwhile the number of vacancies continues to grow, reaching a new record high.”

“There has been a slight pick-up in pay growth in cash terms, which means that although earnings are still growing less than inflation, the gap has narrowed.”

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.