- Nick Palmer, ONS statistician
Contrary to expectations, British unemployment rate suddenly fell, while wages rose at their fastest pace in more than six years. The UK jobless rate slid to 5.5% in July, hitting the lowest level since 2008. Nevertheless, the claimant count rate remained at 2.3% in August, the lowest rate since February 1975. In a report, Office for National Statistics said that UK claimant count change climbed to a seasonally adjusted 1,200, from -6,800 in the previous month, when the figure was revised down from -4,900. Economists, however, had predicted a decline of 5,000.
Meanwhile, wages continued to rise, with pay excluding bonuses climbing 2.9% when comparing May to July with the same period a year earlier. The figure followed the 2.6% increase in July and beat economists' expectations for a 2.5% gain. The Office for National Statistics said that was the fastest pace of wage growth since the three months to January 2009. With inflation running at 0.1% in July, that suggests the long-running squeeze on living standards has come to an end. City analysts said the pay data showed consumer demand, a key driver of the UK economic growth, would be boosted by the increase in real wages. The Sterling strengthened versus the Euro by one cent following the news and was up 0.7 cents against the Dollar, indicating that markets are expecting a slightly earlier rise in UK interest rates.
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