The UK unemployment has fallen to its lowest level in 42 years, in a further sign that the economy is weathering the Brexit storm.
The unemployment rate fell to 4.6 percent, according to the Office for National Statistics, with the number of people unemployed falling by 53,000 to 1.54 million in the three months to March.
However, inflation began to outstrip wage growth, hitting 2.7 percent in April, up from 2.3 percent the previous month and at its highest level for almost four years. In comparison, average weekly earnings excluding bonuses increased by 2.1 percent.
The employment rate hit was 74.8 percent, the highest since records began in 1971.
Maike Currie, investment director for personal investing at Fidelity International, comments:
“With yesterday’s inflation figures showing CPI at 2.7 percent and expected to rise even further, prices are likely to outpace wage growth, tightening the squeeze on UK households. As each month rolls by we’ll be getting progressively poorer as the wages we are earning struggle to keep up with the prices of the goods and services we consume. Given that consumer spending remains the backbone of the UK economy, this is bad news for economic growth.
“Many have pointed to wage growth as the ‘missing piece of the puzzle’. While there are more people employed in this country than ever before, the problem is that our wages are increasing at a glacial pace.”