March 8 2014 Latest news:
Wednesday, January 22, 2014
Unemployment in the UK has fallen to within touching distance of the figure at which the Bank of England has said it may start to consider an increase in interest rates.
But in a separate announcement today, the bank’s policy makers indicated that they “see no immediate need to raise rates” even if the threshold set in its forward guidance on monetary policy is met in the short term.
New data from the Office for National Statistics (ONS) showed that the number of people out out work plunged by 167,000 in the quarter to November to 2.32million, representing the second biggest fall since records began in 1971 and the lowest total since the autumn of 1997.
It represents an unemployment rate − the number of people out of work expressed as a percentage of the total workforce − of 7.1%, down 0.5% on the previous quarter and 0.6% lower compared with the same period a year earlier.
The Bank of England pledged last year not to consider raising its interest rate above the current level of 0.5% until unemployment fell to 7.0%, although at that time it did not expect such a level to be reached until 2016.
It has stressed, however, that a fall in unemployment to 7.0% or below will not automatically trigger a rise in rates, and the minutes of the latest meeting of the bank’s Monetary Policy Committee, also released today, make it clear that it is in no hurry to shift its position.
Today’s data from the ONS also shows that the narrower count of those eligible for the Jobseeker’s Allowance fell by 24,000 in December to 1.25m, representing a 14th consecutive monthly fall and the lowest level for nearly five years.
The number of people in work, meanwhile, has reached a record high of just over 30million, with an additional 280,000 people in employment in the quarter to November compared to the previous three months and 450,000 more compared with a year earlier.
There was also a fall in the number of people working part-time because they could not find full-time jobs, with the figure down by 12,000 to 1.4m.
Long-term unemployment (those out of work for more than a year) also fell, by 61,000 to 839,000, and unemployment among young people (those aged 16 to 24), by 39,000 to 920,000.
The labour market data also shows that average earnings increased by 0.9% in the year to November, unchanged from the previous month and still well below the current annual rate of inflation despite its recent fall to 2.0%, in line with the Bank of England’s target.
At local level, claimant count followed the national downward trend in most parts of Suffolk and north Essesx last month.
The biggest falls came in the Braintree district, where the count fell by exactly 100 compared with November to 1,816 and the unemployment rate by 0.2 of a percentage point to 1.9%, and in Chelmsford, where the total was down 122 at 1,973 and the rate 0.1% lower at 1.8%.
Elsewhere in north and mid Essex, a fall of 29 in Uttlesford, taking the total to 511, also left the local rate 0.1% down, at 1.0%, while relatively smaller falls saw the rate remain unchanged in Colchester, where the count fell by 31 to 2,366 (a rate of 2.1%), and Maldon, down 29 at 664 (1.8%).
However, in Tendring, the count climbed by 63 to 2,901, leaving the unemployment rate 0.1% higher at 3.8%.
In Suffolk, claimant counts were also up in Mid Suffolk, where the total rose by 29 to 807 and the rate by 0.1% to 1.4%, and in Waveney, where the total grew by 49 to 2,238 although the rate remained unchanged at 3.3%.
All other parts of the county, however, saw a fall in claimants. The biggest changes, cutting the local rate by 0.1% in each case, came in Suffolk Coastal, down 64 to 813 (1.1%), and St Edmundsbury, down 57 to 1,110 (1.6%).
Smaller falls left the rates unchanged in Ipswich, down two to 3,070 (3.5%), Forest Heath, down 23 to 603 (1.6%), and Babergh, down 31 to 867 (1.7%).
Across the East of England, the claimant count fell by 2,018 to 82,862, representing a rate of 2.2% compared with a national average of 2.9%.
Employment Minister Esther McVey said: “Creating jobs and getting people into employment are central to our economic plan to build a stronger, more competitive economy, so it is very encouraging news that we’ve seen a record-breaking rise in employment over the last three months − the largest ever.
“With the highest quarterly fall in unemployment since 1997, it’s clear that the Government’s long-term economic plan to get people off benefits and into work so they can secure their future is proving successful.”
Shadow work and pensions secretary Rachel Reeves said the fall in overall unemployment was welcome but added: “The Government should use this opportunity to tackle the unacceptably high levels of long-term unemployment and youth unemployment. More than 900,000 young people are unemployed and over 250,000 young people are long-term unemployed.
“These figures also show prices are still rising more than twice as fast as wages which means working people are over £1,600 a year worse off on average under this out-of-touch Government.”
And TUC general secretary Frances O’Grady said: “It’s encouraging to see another big fall in unemployment, particularly amongst young people who until now haven’t benefited from rising job levels.
“But while headline unemployment is within a whisker of the bank’s forward guidance threshold, an early interest rate rise would clobber mortgage-holders and businesses, jeopardising our economic recovery.
“Patchy levels of jobs growth in parts of the North and the continuing squeeze on living standards should make the Bank of England think twice before considering a rate rise.”