Unemployment falls to its lowest level in more than a decade despite Brexit

Unemployment has fallen to just 4.8% in Britain, defying forecasts of a Brexit-driven rise to reach its lowest level in more than a decade.

The unemployment rate, which is given as a three-month average, was expected to remain unchanged from last month’s reading of 4.9%.

The fall to 4.8% represents the lowest unemployment rate since mid-2005, the Office for National Statistics said on Wednesday.

Employment also remains at its highest level since records began, at 74.5% of the population.

There were 31.80 million people in work between July and September, 49,000 more than for April to June 2016 and 461,000 more than for a year earlier.

Since the Brexit vote, various economists and financial institutions have predicted that the UK’s unemployment rate will shoot up as a result of the vote to leave. Credit Suisse, for example, predicts an increase to 6.5% for the base rate, equivalent to roughly 500,000 jobs being lost. However, October saw the rate remain near its record low and Wednesday’s figures show the trend appears to be holding up.

The Bank of England expects unemployment to rise to 5.5% once the full effects of the referendum are felt across the economy. However, BOE governor Mark Carney has said that the bank is willing to allow inflation to overshoot its target in order to protect jobs.

Average earning grew by 2.4% in October, a slight acceleration on September’s figure of 2.3%. It follows a surprise fall in inflation on Tuesday to 0.9%, meaning wages in Britain are currently rising faster than prices.

The only thing that could worry the government in an otherwise reassuring set of numbers is a big jump in the number of people claiming unemployment-related benefits. 9,800 more people claimed benefits in October compared to September, far more than the 2,000 increase economists had expected. In total, 803,300 people claiming unemployment-related benefits in October.

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