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Roundup: British unemployment rate reaches record low

Xinhua, June 17, 2015 Adjust font size:

The British unemployment rate fell to 5.5 percent in the three months to April 2015, hitting a record low since mid-2008, official data showed Wednesday.

The unemployment rate is in line with the market estimation consensus. Meanwhile, the average Briton's total pay increased substantially.

BIG PAY GROWTH

There were 1.81 million unemployed people in the three months to April 2015, down by 43,000 compared to the three months to January 2015, and 349,000 less than a year earlier, data by the Office for National Statistics (ONS) showed.

The employment rate for those aged 16 to 64 over the same period was 73.4 percent, up slightly from the three months to January 2015 (73.3 percent), figures showed.

There were 31.05 million people in employment aged 16 and over, 114,000 more than for the three months to January and 424,000 more than for a year earlier.

In the same period, British employees' total pay both including and excluding bonuses increased by 2.7 percent compared with a year earlier, noted the ONS.

Official figure showed that British consumer prices index (CPI) increased merely by 0.1 percent in the year to May 2015.

Claims for unemployment benefit, however, fell by 6,500 to totally 797,800 in May 2015 from the previous month.

INTEREST RATE BET

Although unemployment rate keeping dropping and Briton's pay increasing, experts here reckon that the central bank should maintain the current ultra low interest rate until next year.

Marin Beck, senior economic adviser to the EY ITEM Club, said in a note: "Today's labor market data is further evidence that the pattern of sharp falls in unemployment and subdued wage growth that the UK labor market has seen over the past few years has started to turn."

"Alongside the considerable ease of the pace of decline in unemployment, there was a further acceleration in wage growth," said Beck.

"This is a reaction to the tightening of the labor market and the emergence of skills shortages in some sectors. We expect this pattern of smaller declines in unemployment and stronger growth in wages to continue," he said.

The London-based economic forecaster continues to expect the first move to come in February 2016, by which time CPI inflation will have moved back above one percent and British central bank's measure of labor market slack is likely to have been largely eroded.

Vicky Redwood, chief UK Economist at Capital Economics, commented: "The latest labor market figures contained further signs of a pick-up in nominal wage growth."

"If this continues without any recovery in productivity, then a rate rise could come back on the table this year. However, we remain optimistic about the scope for a productivity rebound," said Redwood.

The British economic researcher estimates that the central bank will keep rates on hold until next year. Endit