19 Feb 2014

Unemployment falls to 2.34 million

Unemployment falls by 125,000 to reach 2.34 million, with the number of people claiming out-of-work benefits also declining as the economy recovers from recession.

The release of official figures showing a reduction in the jobless total between October and December 2013 coincides with a drop in jobseeker’s allowance claims, which fell by 27,600 to reach 1.22 million in January.

The unemployment rate is now 7.2 per cent, just above the 7 per cent threshold that Bank of England Governor Mark Carney had previously said could trigger a rise in interest rates before he changed his “forward guidance” policy.

It is higher than the 7.1 per cent figure announced in January because it covers a different three-month period.

The rate at which unemployment has been falling is likely to have slowed down. Nick Palmer, ONS

Nick Palmer, senior labour market statistician at the Office for National Statistics, said: “The main conclusion that should be drawn from these latest figures is that the rate at which unemployment has been falling is likely to have slowed down.”

Average earnings increased by 1.1 per cent in the year to December, 0.2 per cent up on the previous month.

There are now a record 14 million women in work, but 1.4 million people are in part-time jobs because they cannot find full-time work, a fall of 29,000 over the latest quarter, but 46,000 higher than a year ago.

Youth and long-term unemployment have both fallen, but there has been little change in the number of people classed as economically inactive, which has remained just under 9 million.

Last week, with unemployment falling faster than expected, Mr Carney revised his “forward guidance” policy amid fears that interest rates could go up.

A host of factors will now be considered by the Bank of England’s monetary policy committee before the historically low 0.5 per cent base rate is increased, rather than just the unemployment total.