Investment Clock insights

Monthly Labour market report shows UK unemployment rate lowest since 1975

Ian Kernohan

15 March 2017

Aside from the weakness in pay growth, this was a robust set of numbers: the number of people in work increased, and the unemployment total has fallen by 106,000 over the past 12 months.  At 74.6%, the employment rate was the joint highest since records began in 1971. The unemployment rate is now 4.7%, the lowest rate since 1975, although just a smidge above the Bank of England’s new estimate for the equilibrium rate (4.5%). Regular pay growth was disappointing at just 2.3%, and with inflation rising, a squeeze on real household incomes is a major reason why we expect economic growth to slow this year, and the Monetary Policy Committee to keep interest rates on hold until 2019 at the earliest.

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