Unemployment hits lowest level in 40 years
Unemployment fell by 65,000 between April and June to 1.36 million, the lowest for more than 40 years, official figures show.
Productivity was up by 0.4% during the same period, however wage growth remained the same.
Average weekly earnings, excluding bonuses, rose by 2.7% – unchanged on the month before. The latest reading is more than the current inflation rate of 2.4%.
Real wages grew by just 0.4%, according to the Office for National Statistics (ONS). This was a slight drop on last month’s 0.5% figure.
The unemployment rate was 4%, down from 4.2% the month before.
The data also showed a “substantial fall” in the number of people on zero-hours contracts, with 780,000 people on one in their main job in the second quarter – 104,000 fewer than during the same period last year.
Senior ONS statistician Matt Hughes said: “The number of people in work has continued to edge ahead.
“The unemployment rate is now at its lowest since the winter of 1974-75.”
The ONS said the growth in employment was being driven by UK nationals, with a record 86,000 fall to 2.28 million of EU nationals working in the UK.
This is the largest annual decline since comparable records began in 1997.
A report finds more than half of firms have raised starting salaries to recruit staff and put up wages to retain existing workers
It comes after a survey of 2,000 employers by the Chartered Institute of Personnel and Development (CIPD), the professional body for HR staff, and recruitment firm Adecco, found firms are suffering from staff shortages because of a fall in EU nationals coming to the UK.
Commenting on the latest ONS numbers, Tej Parikh, senior economist at the Institute of Directors, said: “The enduring desire for businesses to hire and create new positions is without doubt a sign of strength in the face of unprecedented economic uncertainty.
“Yet with the pool of available workers shrinking at a rapid speed, particularly given flagging immigration numbers, firms are finding it harder to recruit the staff they need.
“Under any normal circumstances this would mean pay packets should rise markedly as corporates compete for workers, but we shouldn’t hold our breath.
“Many businesses are still struggling to find the margins to notably boost salaries given sky-high business rates, the rise in national living wage, and subdued productivity growth