UK unemployment at its lowest since 1975

Pay in real terms drops 0.5% as cost of living has risen in response to Brexit-hit pound

The Office for National Statistics (ONS) said the number of people in work rose by 125,000 to 32.07 million. Photograph: iStock
The Office for National Statistics (ONS) said the number of people in work rose by 125,000 to 32.07 million. Photograph: iStock

UK employment has reached an all-time high and pay growth picked up pace, easing the pressure on cash-strapped households confronted by higher inflation.

The Office for National Statistics (ONS) said the number of people in work rose by 125,000 to 32.07 million in the three months to June, with the employment rate climbing by 0.3 per cent to a record 75.1 per cent.

Annual growth in wages was 2.1 per cent for April to June, up from a revised figure of 1.9 per cent for March to May.

Once bonuses are stripped out, pay expanded by 2.1 per cent over the period, rising from 2 per cent.

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However, once inflation is taken into account, total pay in real terms sank by 0.5 per cent both including and excluding bonuses.

It comes as the cost of living – which has marched higher in response to a Brexit-hit sterling – held steady at 2.6 per cent in July, in line with the rate for June.

Record high employment

ONS senior labour market statistician Matt Hughes said: "The employment picture remains strong, with a new record high employment rate and another fall in the unemployment rate.

“Despite the strong jobs picture, however, real earnings continue to decline.”

The jobs market remained a bright spot for the UK economy, with the unemployment rate dropping by 0.2 per cent to 4.4 per cent for the three months to June, its lowest level since 1975.

The number of people out of work dropped by 57,000 on the quarter to 1.48 million – a 12-year low.

Meanwhile, the so-called claimant count fell by 4,200 in July to 807,800.

Employment minister Damian Hinds said: "These statistics show that record levels of people are in work across the country and earning a wage, which is great news.

“Over the past year the rise in employment has been overwhelmingly driven by permanent and full-time jobs, as employers continue to invest in Britain’s strong economy.

“The task now is to build on this success through Jobcentre Plus and our employment programmes so that everybody can benefit from the opportunities being created.”

- PA