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UK – Unemployment falls to lowest level since 2005

15 June 2016

The unemployment level in the UK was 5.0% for the 3 months to April 2016, its lowest level since August to October 2005, according to the Office for National Statistics.

Between the three months to January 2016 and February to April 2016, the number of people in work increased, the number of unemployed people fell, and the number of people not working and not seeking or available to work (economically inactive) fell slightly.

The number of people in work rose by 55,000, keeping the employment rate at a record high of 74.2%.

Average weekly earnings for employees in the UK in nominal terms (that is, not adjusted for price inflation) increased by 2.0% in the three months to April including bonuses and by 2.3% excluding bonuses compared with a year earlier.

Economic growth in the UK was expected to grow slower amid uncertainty surrounding the EU referendum, which takes place next week on 23 June.

The UK also introduced a new National Living Wage which took effect in April.

“There’s no escaping the Brexit debate – and the impact on jobs is top of the agenda. Companies are holding their breath awaiting the outcome,” Doug Monro, co-founder of Adzuna, said. “And next week employees and employers could awake to a much changed jobs outlook – whatever the result.”

“Uncertainty over the past couple of months has added to pressure on employers, leaving new jobs, investment and finances in doubt and this could stay throughout the summer. The effects of the National Living Wage are only just being felt and advertised salaries are being cutback, falling 1% in April to £33,462 – the highest monthly percentage fall since September 2014.”

“For those in work, rising wages are a positive sign that employers are keen to keep workers happy and focus on retention. After a period of adjustment, summer could see a calmer jobs market once again. But there is also a real risk that a Brexit could affect hiring for the next few years. A Leave vote would mean years of renegotiation, lower international investment, and a rocky political landscape, all of which may hurt hiring.”