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UK unemployment rate at lowest since 2005

According to official figures the UK unemployment rate has fallen to 5%, this is the lowest it has been since October 2005.The number of people in work rose by 55,000 with the employment rate remaining at a records high of 74.2%.

Unemployment fell to 1.67 million in the February to April period this was down 20,000 from the previous quarter, according to the Office for National Statistics (ONS). This rise had been bigger than expected however the ONS explained that this was partly due to the introduction of the National Living Wage. The introduction of the new compulsory National Living Wage of £7.20 an hour for workers aged 25 and above. This affected 1.8 million workers.

In May the number of people out of work and claiming benefits fell by just 400 to 746,000.

Other data from the ONS showed that employment rose by 6,000 due to the rise in the number of people employed by the NHS. However the number of people now employed by the government has fallen to a record low of 2.2 million.

More private firms have been taking on more staff. Over the past year the number employed by a private company has gone up by nearly half a million making it 26 million.

These employment figures are said to be good news however the chief economist at analysts Markit said there are some risks ahead. He explained that data from surveys is suggesting that employers’ demand for staff has cooled and this good news should be taken with caution. Warnings about the new National Living Wage could affect jobs growth as many firms have said that they are going to limit the number of new staff they take on to offset higher wage bills.

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