LONDON: Britain’s labour market recovery gathered speed as a record number of people found work and drove unemployment to its lowest level in more than five years in the three months to April.
Pay growth slowed sharply but the Office for National Statistics suggested it was largely a blip after the April 2013 figure was boosted by delayed bonus payments. Nonetheless, some economists said the weak earnings figures suggested that Britain’s jobs recovery could carry on without pushing up inflation.
The Bank of England says there is room for further growth in the economy before it raises interest rates although some of its policymakers have started to say they see a growing case for a rate hike.
“With few signs still that the labour market is a source of inflationary pressure, we still think the Monetary Policy Committee can afford to keep interest rates on hold until well into next year,” said Samuel Tombs at Capital Economics. Sterling ticked higher and British government bond prices briefly hit a two-month low after the data.
The jobless rate fell to 6.6 percent between February and April — its lowest since the three months through January 2009. That was down from 6.8 percent in the first three months of this year and below the 6.7 percent rate expected in a Reuters poll.
British Prime Minister David Cameron used the numbers to further his case that the Conservative Party deserves to win another term in elections next May and he rounded on Ed Miliband, the leader of the opposition Labour party in parliament.
“He is absolutely allergic to good news because he knows that as the economy gets stronger, he gets weaker,” Cameron said. Reuters
