Figures Are Good News For The Government, Which Argues Its Economic Plans Are Working
Unemployment in the UK has dropped by 99,000 to its lowest level since 2009, new figures released by the Office for National Statistics (ONS) reveal.
At 7.4 per cent, the rate of joblessness is starting to approach the Bank of England's benchmark of seven per cent. If this target is reached, the institution's Monetary Policy Committee will consider raising its base rate of interest from 0.5 per cent.
This would have a substantial impact on small and medium businesses (SMEs), which would likely have to look harder for competitive interest rates on business loans or credit lines.
However, companies with larger capital reserves would benefit from gains in this regard, while middle class, home-owning consumers may have access to greater levels of disposable income.
The number of people out of work across the UK now stands at 2.39 million and the government has acknowledged there is some way to go before the rate falls to an acceptable level.
Employment minister Esther McVey told the BBC: "When people said unemployment would rise, when they said there would be a double dip economy, that did not happen. The reverse has happened.
"So it's tough, it's slow, but we're going in the right direction."
However, the news was not good across the entirety of the UK. Northern Ireland saw unemployment rise to 7.5 per cent.
There were regional disparities visible too, as the north-east of England currently maintains a rate of working-age joblessness of 10.1 per cent, while in the east of England this same figure lies at just 5.6 per cent.
Labour's shadow work and pensions secretary Rachel Reeves welcomed the announcement but said the government must do more to tackle what she called a "cost-of-living crisis".
"[We] would act to tackle the high levels of youth unemployment with a compulsory jobs guarantee, funded by repeating the tax on bank bonuses," Ms Reeves stated.
Confirmation that the rate of unemployment has dropped to a record low is excellent news which reflects that the economy has well and truly turned a corner in recent weeks and months.
"Small businesses are widely regarded as the fundamental backbone of the economy and they should undoubtedly get credit for the part they will have undoubtedly played in this.
"However, with the economy improving, the key issue for small firms is ensuring they have access to vital support which will allow them to benefit from further growth and expansion across the next few years.
"This may come in the form of Government support, but also in the form of access to the right legal advice and support on issues including employment law, regulatory compliance and finance issues."
Fergal Dowling - Partner