LONDON (Reuters) – Britain’s unemployment rate hit its lowest since 1974 at 3.6% in May-July as more people left the labor market, official monthly figures showed on Tuesday.
Economists polled by Reuters had expected the unemployment rate to remain at 3.8%.
The Office for National Statistics (ONS) said the number of people in employment rose by just 40,000 in the May-July period, less than a third of the increase expected by economists polled by Reuters.
The economic inactivity rate, which measures the share of the population that is not working and not looking for work, increased by 0.4 percentage point over the quarter to reach 21.7%.
The ONS said the development was due to an increase in the number of people classified as sick with a long-term condition and students.
The Bank of England is concerned about the increase in inactivity, fearing it will exacerbate inflationary pressures.
Further signs of pressure on labor market prices emerged in ONS figures released on Tuesday.
Wages excluding bonuses rose 5.2%, their highest rate since June-August 2021. Economists polled by Reuters had said they expected a 5.0% increase.
Including bonuses, salaries rose 5.5%, slightly more than the 5.4% expected.
There are also signs of a loss of momentum in the labor market. The number of job vacancies fell by 34,000, its biggest drop in two years, while remaining at a historically high level at 1.266 million.
(Reportage William Schomberg; French version Valentine Baldassari, edited by Sophie Louet)