The UK unemployment rate fell to its lowest level in over 35 years in the three months to June, falling by 57,000.
Official figures from the Office for National Statistics showed the jobless rate fell 4.4 percent in the previous quarter, its lowest since 1975. This was down from 4.9 percent the same time last year, with the employment rate at 75.1 percent, its the highest since comparable records began in 1971.
Average weekly earnings increased by 2.1 percent compared with a year earlier, but with the rate of inflation running at 2.6 percent, real earnings actually fell by 0.5 percent.
Chris Williamson, an economist at IHS Markit, says the persistent lack of an upturn in wage growth “dents the prospect of interest rates rising”, especially given the steadying of inflation in July.
“Although the unemployment rate fell to 4.4% in the second quarter, its lowest since 1975, the tightness of the labour market is still not translating into the sort of wage growth that we would normally be seeing with such few people out of work.
“It’s therefore hard to make the case that wage growth will spike higher, warranting higher interest rates, any time soon.”