UK jobless rate falls to new 43-year-low, but pay growth weakens

LONDON (Reuters) – Britain’s unemployment rate fell to its lowest in over 43 years in the three months to June and fewer workers made do with insecure jobs, but there was little upside for most as pay growth slowed to its weakest in nine months.

Construction workers work on a site in London February 19, 2014. REUTERS/Neil Hall

Tuesday’s official figures also showed the sharpest annual decline in the number of EU workers in Britain since 1997, continuing a trend seen since the 2016’s vote to leave the EU, and a pick-up in annual productivity growth.

Despite some positive elements, the figures painted a largely familiar picture of a tight labour market — including a record number of job vacancies — failing to translate into strong wage growth.

Britain’s economy warmed up a little in the second quarter from its winter slowdown of early 2018, official data showed last week, but there was no sign of an end to its lacklustre performance in the run-up to next March’s Brexit.

“This will not be what the Bank of England will have wanted to see, as one of the justifications for (its) decision to hike rates earlier this month was that it was expecting wage growth to start lifting off. This hasn’t happened yet,” said Emma-Lou Montgomery, an associate director at Fidelity International.

The BoE raised interest rates on Aug. 2 for only the second time since the financial crisis.

Tuesday’s data showed productivity grew at its fastest annual rate since late 2016 and the number of people whose main job was an insecure zero-hours contract fell by the most since 2000, the Office for National Statistics said.

The unemployment rate fell to 4.0 percent in the April-June period,

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