The jobless rate fell to 6.4 percent, the lowest since the fourth quarter of 2008, from... Read More
The jobless rate fell to 6.4 percent, the lowest since the fourth quarter of 2008, from 6.5 percent in the three months through May, the Office for National Statistics said in London today. The result matched the median forecast in a Bloomberg survey. Wages dropped 0.2 percent from a year earlier, the first quarterly decline for the more than five years.
The data comes as the Bank of England publishes its latest economic forecasts today. For Governor Mark Carney and the Monetary Policy Committee, the lack of wage growth may indicate there is enough spare capacity in the economy to keep the benchmark rate at a record-low 0.5 percent until 2015. With inflation accelerating to 1.9 percent in June, real wages for many Britons are continuing to decline.
“We’ve got slack falling very quickly but
wages remaining weak, giving ammunition to the hawkish and the dovish camps” at the BOE, said Rob Wood, an economist at Berenberg Bank in London and a former official at the central bank. “If you’re a dove, you say ‘wage growth hasn’t picked up -- look at earnings growth’ and see that it remains weak, so no sign of inflationary pressure.”
Visitors look at job vacancies and recruitment opportunities displayed during a jobs... Read More
Jobless Total
The pound fell against the dollar after the data were published and traded at $1.6804 at 10:11 a.m. in London, little changed from yesterday.The jobless total fell 132,000 to 2.08 million in the second quarter. Single-month figures showed the rate was 6.4 percent in June compared with 6.3 percent in May and 6.4 percent in April.
Jobless claims, a narrower measure of unemployment, fell for the 21st consecutive month in July to the lowest level since 2008. The 33,600 drop was more than the 30,000 economists forecast. In June, claims fell 39,500 instead of the 36,300 previously reported.
The number of people in work climbed 167,000 to an all-time high of 30.6 million in the second quarter.
While wage inflation has been held back by strong growth early last year, when bonus payments were deferred to take advantage of a cut in the top income-tax rate, there is little evidence of underlying pay pressures. Earnings growth excluding bonuses in the second quarter slowed to 0.6 percent, the least since comparable records began in 2001.
With companies struggling to boost productivity and more than a million part-time workers unable to find full-time jobs, bargaining power over wages remains limited. Sonia forwards are pricing in a quarter-point interest-rate increase by March.
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