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UK unemployment rate holds steady at 7.8%
by James Phillipps on Aug 14, 2013 at 10:06
The unemployment rate remained at 7.8% in June, but jobless benefit claimants fell by almost twice as many as expected.
The unemployment figures are under closer scrutiny than ever after Bank of England governor Mark Carney said he would maintain interest rates at their historic low until unemployment fell below 7%.
Jobless claimant numbers fell by 29,200 according to the Office for National Statistics, well ahead of the 15,000 anticipated in a Reuters poll of economists.
Employment growth rose 69,000 in the three months to June, up 301,000 on the same period last year.
‘The unemployment numbers carry a new-found importance now that the Bank of England has pledged to not raise interest rates until the jobless rate has fallen below 7%,’ said Chris Williamson, chief economist at Markit.
‘The Bank envisaged this not occurring until 2016, but increasingly buoyant survey data suggest the threshold may be breached sooner.
‘Surveys of purchasing managers and recruitment agencies indicate that the labour market improved at the fastest rate for six years in July, with both pointing to monthly employment growth in the region of 50,000 per month.’
‘The PMI surveys for July indicated that firms took on staff at the fastest rate since October 2007, with headcounts rising for the seventh successive month.
‘The improvement was led by services, though construction employment grew at the sharpest rate since 2008, primarily on the back of renewed house building activity, and manufacturers meanwhile boosted workforce numbers to the greatest extent for two years.’
Average earnings growth rose to 2.1%, the highest level since 2011, although excluding bonuses this fell to 1.1% with both numbers well below consumer price inflation which is running at 2.8%.
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