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UK Jobless Rate At 42-Year Low; Wage Growth Slows

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Britain's unemployment rate declined to the lowest level in 42 years and the employment rate was the highest on record, while wage growth continued to lag behind inflation.

The ILO jobless rate fell to 4.5 percent in the three months to May from 4.9 percent in the same period of the previous year, data from the Office for National Statistics showed Wednesday.

The figure was the lowest since 1975. The rate was expected to remain at 4.6 percent, as seen in the quarter to April.

The number of unemployed decreased by 64,000 from the previous three months to 1.49 million. Meanwhile, employment rose by 175,000 to 32.01 million.

The employment rate was 74.9 percent, the highest since comparable records began in 1971.

Despite the strong jobs picture, there has been another real-terms fall in total earnings, with the growth in weekly wages low and inflation still rising, ONS statistician Matt Hughes said.

At 2.9 percent, inflation had reached a near four-year high in May.

Including bonus, average earnings for employees increased 1.8 percent, slower than the 2.1 percent growth seen in the three months to April. Excluding bonus, earnings rose 2 percent compared with a year earlier.

Adjusted for inflation, total pay fell 0.7 percent, the sharpest decrease since mid-2014.

The continued weakness of wage growth provides some ammunition to the more dovish members of the Monetary Policy Committee, Paul Hollingsworth, an economist at Capital Economics, said.

The Bank of England is likely to hold of a while longer, rather than raise interest rates imminently, the economist added.

by RTT Staff Writer

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