- IHS Global Insight
The UK unemployment rate dropped to the lowest level in seven years in the third quarter, extending an improvement in the labour market, the Office for National Statistics reported. The jobless rate declined to 5.3%, whereas economists had expected the rate to remain unchanged at 5.3%. However, the claimant count increased for the third consecutive month, up by 3,300 in October to 795,500. Despite the improvement in the headline numbers, the report also showed some weakening in the pace of wage growth. Earnings excluding bonuses climbed an annual 2.5% in the reported period, down from 2.8% in the previous three months and missing expectations for a reading of 2.6%. Total pay rose 3%, due to a 15% surge in bonuses.
The BoE's November Inflation Report showed labour demand growth had remained robust, and both wage and productivity growth had picked up since last year, but remained below pre-crisis rates. The new forecasts also showed the central bank saw the unemployment rate falling further to 5.3% in the fourth quarter of this year, then remain around that level throughout next year, before sliding slightly to 5.2% in Q4 2016.
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