UK unemployment at lowest rate since December 2008

 
Billy Ehrenberg
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UK unemployment has reached its lowest rate since October - December 2008 (Source: Getty)

The unemployment rate has continued to fall, dropping from 6.6 per cent to 6.5 per cent during the three months to May in line with analysts' predictions - the lowest it has been since October to December 2008.

The data released by the Office for National Statistics (ONS) shows that unemployment has been dropping for a sustained period, and that today's employment rate of 73.1 per cent is the highest on record. The last time it reached a similar peak was in December 2004 to February 2005.

According to the ONS there are 2.1m unemployed people in the UK, down 121,000 on the December 2013 to February 2014 figure.

Unemployment has tumbled at such a rate that pressure is building on the Bank of England to raise interest rates. The Bank has already abandoned the seven per cent mark as a trigger for rate rises.

The number of people in employment has reached 30.6m, but some commentators maintain that underemployment remains an issue.

Although the UK's job-creation record is strong, real wages have not kept up with inflation, which is 1.9 per cent according to yesterday's figures. Pay including bonuses was up 0.3 per cent on last year and pay excluding bonuses was 0.7 per cent higher, but real wages have continued to fall, dashing hopes of respite in the cost of living crisis.

Think tank Niesr has previously estimated that real wages won't catch up to their pre-crisis level until 2018, implying an entire lost decade for real wages, with economists expecting real earnings growth to begin some time later this year.

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