UK employment jumps, jobless rate lowest since July 2008

[LONDON] The number of people in work in Britain jumped by its biggest amount in almost a year in the three months to February and the unemployment rate fell to its lowest in nearly seven years.

The last official data on employment and earnings before a national election on May 7 also showed the pace of growth in workers' pay generally slowed in the three months to February.

The Office for National Statistics said the number of people in employment rose by 248,000 - the biggest increase in a three-month period since April 2014 - to a record 31.049 million.

It said the employment rate of 73.4 per cent showed an unusually big jump to hit a new all-time high.

The ONS said Britain's unemployment rate fell to 5.6 per cent, its lowest level since July 2008 and down from 7.9 per cent at the time of the last election.

Total average weekly earnings in the three months to February, including bonuses, rose 1.7 per cent compared with the same period a year earlier, slowing from 1.9 per cent in January.

Excluding bonuses, pay rose by 1.8 per cent, picking up a bit of speed.

Economists taking part in a Reuters poll had forecast total earnings would rise by 1.8 per cent and that earnings excluding bonuses would increase by 1.7 per cent.

Inflation, as measured by the consumer prices index, plunged to zero per cent in February and in March, pushed down by plunging oil prices, meaning living standards are rising after a long period of earnings falling in real terms.

Mr Osborne has said the long-awaited pick-up in earnings seen in recent months proves that his economic plan has been a success and voters should return his Conservative Party to power at the election.

The opposition Labour Party says the recovery has done little for many workers whose earnings remain below their level before the last election in 2010, when inflation is taken into account. Such weak wage growth over a five-year period has little precedent in modern British economic history.

The Bank of England is also keeping a close eye on wages as it considers when to start raising interest rates from their record low of 0.5 per cent.

The BoE predicts wage growth will speed up sharply to reach 3.5 per cent by the end of this year.

The ONS said pay, including bonuses, rose 1.3 per cent on the year in February alone, compared with 1.4 per cent in January. Excluding bonuses, pay rose 2.2 per cent in February, the biggest increase since May 2011.

An ONS official attributed the increase in part to new European Union rules for bankers' pay which set maximum bonus levels as a proportion of basic salaries and have pushed regular earnings higher for many workers in financial services.

The number of unemployed people fell by 76,000 to 1.838 million.

The number of people claiming unemployment benefit in March fell by 20,700, less than a forecast by economists for a fall of 29,500.

REUTERS