Steady jobless rate as market watches closely

UNEMPLOYMENT fell by 4,000 in the second quarter this year, with the rate stable at 7.8 per cent, despite the Bank of England projecting a rise.
However, the single-month estimate of unemployment in June was only 7.4 per cent, with the quarterly figure inflated by higher joblessness in April and May.
Despite the fall in the unemployment rate, and the decline in the number of jobseekers, youth unemployment rose to 21.4 per cent, meaning an estimated 973,000 under-25s are out of work.
The employment rate for 16-64 year olds was 71.5 per cent, up 0.1 percentage points from January to March 2013 and up 0.4 from a year earlier. The number of people in employment increased by 307,000, despite public sector cuts.
Total hours worked per week were 953.1m for April to June 2013, up 2.8m from January to March 2013 and up 18.4m on a year earlier.
Total pay rose by 2.1 per cent compared with April to June 2012. Regular pay rose by 1.1 per cent over the same period. However, the figures were distorted as companies held back bonuses for top earners until after the top rate of income tax was cut in April.
Newly released information on unemployment is likely to be watched closely as markets try to predict future changes to interest rates, as new Bank of England governor Mark Carney’s forward guidance pegs decisions on interest rates to the unemployment situation. When unemployment reaches seven per cent or below, the current interest rates will be reviewed.
The Bank’s own projections had forecast a small rise in June, to 7.9 per cent. There are currently 2.51m people without work and looking for it in the UK, Though rate-setters expect that unemployment will not reach the seven per cent threshold until the second half of 2016, other analysts are now predicting a faster decline in joblessness as the economy grows.