UK unemployment falls to 44-year low

The Office for National Statistics announced the unemployment figures for October Credit: Gareth Fuller/PA

UK unemployment dropped to its lowest level in 44 years in the three months to October, as the number of unemployed women hit a record low.

However, the reduction in unemployment came as wage growth stalled over the period and the number of job vacancies also shrank.

The number of people claiming unemployment benefits decreased by 13,000 to 1.28 million for the quarter, the Office for National Statistics (ONS) said.

It meant the rate of unemployment stayed flat at 3.8%, surpassing analyst expectations which had forecast an increase to a 3.9% rate of unemployment.

Unemployment rates over the last six years. Credit: ONS

This was largely driven by a decrease in the unemployment rate for women, which fell to a record low of 3.5% for the period.

Meanwhile, the number of people in work increased by 24,000 to 32.8 million for the quarter, while the proportion of people in employment stayed flat at 76.2%.

Despite the increase, more people were also deemed economically inactive during the period, with the level increasing by 19,000 to 8.61 million for the quarter.

Economic inactivity rates have fallen over the last year. Credit: ONS

David Freeman, head of labour market and households at the ONS, said: “While the estimate of the employment rate nudged up in the most recent quarter, the longer-term picture has seen it broadly flat over the last few quarters.

“Pay is still increasing in real terms, but its growth rate has slowed in the last few months.”

Average total pay increased by 3.2% in the quarter, as it slowed down from 3.6% the previous month, the ONS said.

Analysts had predicted that growth would only decline to 3.4%.

Average total pay slowed more than analysts predicted it would. Credit: ONS

The slowdown was driven by growth rate of just 2.4% in October, as it reported the biggest monthly slump in bonus payments for more than five years.

The figures also revealed that job vacancies slid by 20,000 to 794,000, as the rate of decline continued to accelerate from the previous period.

Vacancies have now declined for ten consecutive months and have now fallen below 800,000 for the first time in more than two years.

Once inflation is taken into account, employees' earnings are lower than the 2008 economic crash. Credit: ONS