Jobless rate lowest since 2005 but wage growth slows

Official figures show a surprise dip in the UK’s jobless rate, which fell to its lowest level since 2005, but there is concern about a further dip in wage growth.

Data from the Office for National Statistics (ONS), covering the three months to January, showed the unemployment rate falling 0.1% to 4.7% in the period – matching levels last seen before the financial crisis.

It suggests the labour market remains resilient in the wake of the UK’s looming divorce from the EU, as the jobless total fell by 31,000 to 1.58 million, with 315,000 more people in work compared with a year earlier.

However, ONS figures showed a record number of people – 905,000 of them – on controversial zero-hours contracts for their main job.

The statistics also raised concerns that consumer spending power is being eroded rapidly as wage growth, excluding bonuses, eased back to an annual rate of 2.3% from 2.6% measured last month.

The rate fell by 0.4% on the month, to 2.2%, when the effects of bonuses were included.

The deceleration is taking place at a time when inflation is nearing 2% as prices rise to reflect the fall in the pound’s value since the Brexit vote – a scenario that makes imported goods more expensive.

David Freeman, senior statistician at the ONS, said: "With the unemployment rate last lower in summer 1975 and the employment rate still at a record high, the labour market remains robust.

"But smaller wage increases and higher inflation mean the growth in real earnings has slowed sharply in recent months."

The latest inflation figures – for February – were delayed by a week as the ONS published an update to its inflation basket and prepared to roll out a new headline measure of consumer inflation.

Employment Minister Damian Hinds said: "I’m delighted by another set of record-breaking figures showing more people in work than ever before and unemployment falling to its lowest in 12 years.

"Employment is up, wages are up and there are more people working full-time.

"This is good news for hard-working families across the UK as we continue to build a country that works for everyone."

In its reaction to the figures, the TUC focused on the growth in zero-hours contracts.

Its general secretary, Frances O’Grady, said: "Zero-hours contracts allow bosses to treat workers like disposable labour.

"If you’re on a zero-hours contract you have no guarantee of work from one day to another. Put a foot wrong and you can be let go in a heartbeat. Turn down a shift because your kid’s sick and you can be left with little or no work."

She called for employment law to be dragged into the 21st century.

(c) Sky News 2017: Jobless rate lowest since 2005 but wage growth slows