UK Jobless Rate Hits 7-Year Low, BoE to Note Cooler Pay Growth

Britain’s jobless rate has fallen to its lowest level in more than seven years but pay growth was a bit slower than expected, suggesting the labour market is not hot enough to speed up a Bank of England interest rate hike.

Britain’s unemployment rate fell to 5.4 percent in the three months to August, down from 5.5 percent in the three months to July, the Office for National Statistics said.

It was the lowest jobless rate since the second quarter of 2008, before the worst of the financial crisis, and below a median forecast of 5.5 percent in a Reuters poll of economists.

Investors focused initially on the wage growth figures that were slightly weaker than forecast but sterling recovered from an initial fall as economists highlighted the strong job creation numbers.

The number of people in employment jumped by 140,000, pushing the employment rate to 73.6 percent, the highest since records began in 1971. The number of unemployed people was down by 79,000, the biggest fall since the three months to January.


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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.