Unemployment drops in Wales to year long low

Unemplyoment figures graphic

Unemployment fell by 75,000 to 1.46 million in the three months to July 2017 to stand at 4.3 percent, according to the Office for National Statistics (ONS).

The disappointing picture on wages comes despite a surge in the labour market.

The jobless claimant count declined 2,800 for August after a revised 2,900 decline the previous month and compared with expectations of an increase of around 1,000 for the month.

The Scottish Government highlighted that the employment rate reached a record high of 75.8% between May and July - a rise of 44,000 on May to July 2016 and the highest rate of any United Kingdom nation.

"In particular, the number of people aged 16 to 64 not in the labour force because they are looking after family or home is the lowest since records began, at less than 2.1 million".

The UK gilts jumped Wednesday after the country's unemployment rate fell in July while wage inflation registered a weaker-than-expected increase.

Only Northern Ireland has a higher economic inactivity rate.

"Lagging wages makes it more likely the Bank of England will look through rising inflation when it decides on interest rates this week", said Fidelity International's Ed Monk.

"Prices are rising above target, which creates the case for raising rates, but today's wage data suggests all is still not right in the economy".

The pressure on wages-right as the United Kingdom braces for the potential economic of Brexit-has led the government to finally lift a cap on public sector pay this week.

The government on Tuesday signaled its intention to raise salaries for all public sector workers by more than a 1-percent cap in place during several years of state austerity.

Pressure on real incomes is particularly hitting public-sector workers, who have had pay increases capped at 1% since 2013.

The September meeting of the Monetary Policy Committee concludes at 12:00 pm Wednesday and so the latest labour market data could hold sway over the tone of Thursday's monetary policy statement.

Unemployment is below the level which the BoE expects to trigger faster pay growth.

"But the recession, and its aftermath, has weakened the link between unemployment and wages".

Last month just two MPC members backed a rate rise.

The rise has been partly fuelled by the highest female employment rate since 1971.

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