Unemployment in the UK at the lowest level since 2008

According to the Office for National Statistics (ONS), Q2 2014 saw the rate of unemployment in the UK drop to 6.4%. The last time the number of jobless was this low was back in the second half of 2008, and there are now a reported 30.6 million people in work – up 167,000 compared to Q1.

The reports based on the Labour Force Survey indicate that despite unemployment falling, UK salaries do not appear to be increasing in parallel, with total pay including bonuses actually falling 0.2% compared to the same quarter a year ago. This is the first drop in average earnings since 2009. Remuneration excluding bonuses was however slightly higher, by 0.6%. The ONS feels this may be down to many employers paying bonuses in April 2013, a month later than usual, due to timing of the high rate tax drop to 45p. Overall, though, pay has seen a fall in real terms, with wages and bonuses not keeping pace with inflation.

According to Ian Brinkley, the University of Lancaster’s Work Foundation chief economist, the UK has “strong employment numbers, a significant drop in unemployment and a sharp fall in the number of people in part time jobs who say they would like full time work.” Mr Brinkley believes that that the Government’s recovery strategy is finally starting to see improvements as far as unemployment is concerned.

Echoing the ONS’ latest findings, he describes wage trends as ‘dismal’, adding his voice to other commentators who feel that typical working households throughout the UK are still feeling economically squeezed. The failure of wages to rise means it is unlikely that the Bank of England will raise interest rates in the very near future.

The ONS statistics also highlight growing numbers of workers who have come to the UK from other countries, particularly Poland, Hungary and Lithuania, who accounted for a combined rise of 178,000 in the overall employment increase. Job Seeker’s Allowance claimants have fallen to 1.01 million, signalling the 21st consecutive drop.

Danny Alexander, the Government’s Chief Secretary was encouraged by the latest figures, saying “There is still a long way to go, but this is solid progress and…is particularly encouraging and welcome.”

Visit our news and blog pages regularly for more industry reports along with opinions based on our insight as executive recruitment experts.