U.K. unemployment reached its lowest level in more than a decade in April and the employment rate hit a record high, suggesting that the labor market remains solid despite the uncertainty stemming from the June 23 referendum on the country’s EU membership.
The ILO jobless rate came in at 5 percent in the three months to April, data from the Office for National Statistics showed Wednesday.
The figure was the lowest since October 2005 and below the expected rate of 5.1 percent. In the same period of last year, the rate stood at 5.5 percent.
The employment rate was 74.2 percent, the joint highest since comparable records began in 1971. At the same time, there were 31.59 million people in work, which was 55,000 more than for the three months ended January.
In the three months to April, average earnings including bonus increased 2 percent and that excluding bonuses climbed 2.3 percent.
In May, the claimant count rate held steady at 2.2 percent, marginally above the 2.1 percent economists had forecast.
The number of people claiming unemployment benefits decreased slightly by 400 from April. The figure was forecast to remain flat.
Ruth Miller at Capital Economics said the solid labor market figures should allay fears that uncertainty ahead of the referendum has significantly weighed on the economy in the second quarter.
If wage growth continues to pick up, and the UK votes to stay in the EU, a rate hike may well come back on the agenda before too long, the economist added.
On the increasingly questionable assumption that the UK votes to stay in the EU in next Thursday’s referendum, IHS Global Insight economist Howard Archer expects the reduced uncertainty to boost growth and business confidence, thereby supporting further improvement in the labor market.
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