Unemployment Falls but No Interest Rate Rise Until May

MARKET REACTION: Unemployment has fallen to its lowest rate since 2008 and inflation is just 1.2% - but lack of wage increases means no interest rate rises until 2015

Emma Wall 15 October, 2014 | 2:30PM
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Unemployment fell to just 6%, the lowest since late 2008 as robust economic growth created more jobs during June to August, according to the Office for National Statistics showed Wednesday. This was down from 6.5% for the March to May period, and less than the 6.1% economists had forecast.

During June to August, there were 1.97 million unemployed people, 538,000 less than a year earlier. This was the largest annual fall in unemployment since records began in 1972. At the same time, people in employment increased by 46,000 from March to May to a record 30.76 million.

Those claiming jobseekers allowance fell to 2.8% in September, as expected, from 2.9% in August. In real terms this was a decrease of 18,600 from August.

For June to August, pay including bonuses was 0.7% higher than a year earlier, in line with expectations. Excluding bonus, earnings climbed 0.9% from last year. This is the second piece of positive economic data this week. Yesterday it was revealed that consumer price inflation eased to a five-year low of 1.2% from 1.5% in August. 

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Emma Wall  is former Senior International Editor for Morningstar

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