United Kingdom unemployment rate unchanged at 5.5% as wages edge up

The rate was unchanged from quarter ending April, but below 6.2 percent seen in the same period of past year.

But figures from the Office for National Statistics (ONS) show unemployment has risen for a third month in a row – the first time this has happened since 2011.

With companies having to raise wages to attract workers, spare capacity in the labor market is a key metric for the Bank of England as officials consider when to end more than six years of record-low borrowing costs.

With inflation around zero for most of this year, United Kingdom households are enjoying the first period of sustained real wage growth since the financial crisis.

“This is a rate of increase that would normally worry policymakers into a pre-emptive hike in interest rates to avoid upward wage pressures feeding through to higher inflation”.

Total pay rose 2.9 per cent year-on-year in the three months to July, according to the ONS.

It represented a 0.5% jump on April to June, with the bulk of the increase coming in July when it measured growth of 3.2%.

Real terms regular pay was also up by 2.9 per cent, the strongest rate since the three months to August 2002, when it climbed by three per cent.

“At 73.5%, the employment rate is the highest it has been”. The employment rate – or proportion of people aged 16 to 64 in work – was 73.5 per cent. There were some signs of softening, with unemployment increasing 10,000 to 1.82 million, while claims for jobless benefits rose 1,200 in August from July.

The chancellor, George Osborne, said: “It is welcome news that pay packets are rising and jobs are being created”.

Welsh Liberal Democrat Shadow Economy Minister Eluned Parrott AM said: “There’s clearly something fundamentally wrong with the way we are managing our economy, and the blame for that rests squarely with the Welsh Labour Government”.