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Jobless rate down but wage growth slows Jobless rate down but wage growth slows
(35 minutes later)
UK unemployment fell back to its lowest rate in 41 years in the three months to January, according to new figures. UK unemployment fell in the three months to January but there was a sharp slowdown in wage growth.
The Office for National Statistics (ONS) said the unemployment rate fell to 4.7%, a level that has not been lower since the summer of 1975. The Office for National Statistics (ONS) said the unemployment rate fell to 4.7% - it has not been lower than that since the summer of 1975.
However, wage growth has slowed significantly to 2.2% from 2.6% in the previous three-month period.However, wage growth has slowed significantly to 2.2% from 2.6% in the previous three-month period.
Although pay is rising above the rate of inflation, currently 1.8%, it is lower than economists expected. Wages are rising above the rate of inflation, which is currently 1.8%, but the gap has narrowed.
Scott Bowman, UK economist at Capital Economics, said: "The latest UK labour market data suggest that average earnings growth is not picking up alongside inflation, resulting in a squeeze on real wage growth."Scott Bowman, UK economist at Capital Economics, said: "The latest UK labour market data suggest that average earnings growth is not picking up alongside inflation, resulting in a squeeze on real wage growth."
But he expects that a shortage of workers will push up pay in the coming months.But he expects that a shortage of workers will push up pay in the coming months.
'Completely unprecedented'
Following last week's Budget, Paul Johnson, director of the Institute for Fiscal Studies (IFS) warned that wages were unlikely to be higher in the next five years.Following last week's Budget, Paul Johnson, director of the Institute for Fiscal Studies (IFS) warned that wages were unlikely to be higher in the next five years.
He said: "On current forecasts average earnings will be no higher in 2022 than they were in 2007. Fifteen years without a pay rise. This is completely unprecedented."He said: "On current forecasts average earnings will be no higher in 2022 than they were in 2007. Fifteen years without a pay rise. This is completely unprecedented."
The unemployment rate was last at 4.7% in 2005 and has not been below that since the summer of 1975.
The ONS said there are 1.58m people out of work and 31.85m Britons in full-time and part-time employment.
The ONS also released data on the number of people on zero hour contracts in their main job, which rose by 101,000 between October and December to 905,000.
This is equal to 2.8% of all people in employment.