UK Unemployment Falls To 6.9%

Number Of People Out Of Work Across The UK Has Fallen To 77,000, According To The ONS

16.04.2014

The UK's rate of unemployment has fallen to 6.9 per cent, according to new data from the Office for National Statistics (ONS).

Improvements in the economy saw hires rise, meaning that the rate of employment has risen to its highest level in five years.

In addition to this, average earnings in the three months to February grew by 1.7 per cent compared to a year earlier, while inflation was found to have fallen to 1.6 per cent in March.

This means that take-home pay is rising in real terms for the first time since the spring of 2010.

Previously wages had gone up, but not in parallel with the consumer price index rate of inflation, which meant that people were actually losing money, even if their pay packet grew by one or two per cent annually.

Chief secretary to the Treasury Danny Alexander welcomed the news, stating: "These figures are some of the strongest evidence yet that we are embedding the recovery. We have record numbers in work and unemployment falling at the fastest rate in over a decade.

"There is still a great deal more to do, but today's announcement is solid progress on building the stronger economy in a fairer society that Liberal Democrats entered coalition to deliver."

Labour also commended the positive figures, but Rachel Reeves, shadow work and pensions secretary, said that youth unemployment is still too high and that most families are £1,600 worse off under the coalition than when Labour were in power.

Howard Archer, chief UK and European economist at IHS Global Insight, told the BBC that one of most interesting aspects of the latest unemployment figures is that it is the first time the rate has dropped below the Bank of England's seven per cent benchmark.

The institution's Monetary Policy Committee previously said they would only consider raising the UK's interest rate above 0.5 per cent if this milestone was reached, but Mr Archer believes that the figure will not rise until 2015.

Expert Opinion
There is much positivity emerging in the business world and these new unemployment figures are a massive indication that the economic recovery is well and truly underway.

"Across recent months we have seen numerous studies indicating that small businesses in particularly are looking to grow their workforce and expand operations, with many harbouring growth ambitions to move to the next level.

"Amid all of the positive news, it is important that SMEs and other companies of all sizes do not get carried away and approach any drastic changes to their operations in a considered manner. Central to this is ensuring they have legal advice on hand which will help them through the tricky growing pains which growth can create, such as employment law and HR issues, regulatory compliance and corporate or commercial deals.

"The right support network is a fundamental part of developing as a small business and getting key advice at the necessary time can be the vital difference between success and failure."
Steven Beahan, Partner