UK unemployment dropped in the three months to December with the corresponding rate remaining at its lowest level in more than a decade as the number of those with jobs grew, pushing the employment rate to a record high, figures from the Office for National Statistics showed Wednesday.

The number of unemployed fell by 7,000 in the fourth quarter of 2016 to 1.6 million. The ILO jobless rate for the quarter was 4.8 percent, unchanged from the previous three months, in line with economists’ expectations.

The latest rate was the lowest since the July to September quarter of 2005. A year ago, the rate was 5.1 percent.

The number of those seeking jobless benefits, known as claimant count, dropped by 42,400 month-on-month to 745,000 persons in January, while economists had forecast an increase of 500 persons. The year-on-year increase in the figure was 2,800 persons.

The claimant count rate fell to 2.1 percent in January from 2.3 percent in December. The rate was the lowest since February 2016, when it was at the same level. Economists had forecast the rate to remain unchanged in January.

The number of people in work grew by 37,000 persons from the previous month to 31.83 million. The employment rate was 74.6 percent, the highest since records began in 1971.

Average earnings, both including bonus, rose 2.6 percent year-on-year in the December quarter after 2.8 percent gain in the previous three months. Economists had forecast 2.8 percent increase. Excluding bonus too, wage growth eased to 2.6 percent from 2.7 percent.

The ONS economists commented that the increase in the number of employed was smaller than the recent past and the steadiness seen in the number of vacancies since early 2015 suggest stable labor demand.

They also noted the jobless rate at its lowest in more than a decade and subdued wage growth raises questions over the amount of spare capacity in the UK labor market.

The unemployment rate, and the ratio of unemployment to vacancies, in particular, both suggest that the labour market is currently tight, they added. Further, the ONS economists said a pick-up in consumer price inflation is eroding wage growth.

The material has been provided by InstaForex Company –