Jobless total down again

By JANE PADGHAM
Updated:

 

There was more fuel for the City's hawks as it emerged that Britain's jobless queue shrank by a bigger-than-expected margin last month while earnings growth picked up slightly.

Government figures showed that the number of unemployment benefit claimants slid by a massive 32,900 to a new 19-year low of 1.24 million last month, with just 4.3% of the workforce out of work. According to the Government's preferred Labour Force Survey measure, the unemployment rate dipped to 6.0% in the three months to June. But the ongoing tightening of the labour market shows little sign of fuelling inflationary pressures, although average earnings growth ticked up to 4.4% in June from 4.3% in May as a result of bonus payments.

There is now speculation that the economy may have avoided the sharp rise in unemployment that was

predicted in the aftermath of last year's growth slowdown.

The economics team at HSBC Markets said: 'While the rate at which jobs are being created has slowed over the last year or two, it is debatable whether unemployment will rise at all given the shallow nature of the downturn.'

The pound was little moved, down half a cent at $1.6140. The dollar was hit by news that insurance firm General American Life was having problems with redemption requests.

Most watched Money videos