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Claimant count at 32-year low

12/12/2007

The number of people claiming unemployment benefit fell to a 32-year low in November, according to official figures.

A total of 813,000 people claimed government support last month, down 11,100 on October's figure and by 134,200 over the year.

The number of out-of-work benefit claimants is now at its lowest level since June 1975, confirmed the Office for National Statistics (ONS).

Britain's unemployment rate also fell modestly, down by 0.1 per cent to 5.3 per cent in the three months to October – with the number of those out of work falling by 15,000 over the quarter.

The number of people in employment increased by 114,000 in the three months to October, climbing to 29.29 million.

Job vacancy levels also increased, reaching the highest level since comparable records began in 2001 during the three months to November. The number of vacancies rose by 14,500 over the quarter to 680,700.

Meanwhile annual growth in headline average earnings also eased from 4.1 per cent in September to four per cent in October.

Analysts said the figures suggested there still appeared to be sufficient slack in the labour market to limit workers' bargaining power over wages, while stressing strong competition and higher input costs were maintaining pressure on companies to limit pay.

The data is likely to calm inflationary fears and give scope to the Bank of England to introduce further interest rate cuts, economists added.

Monetary policy committee (MPC) members at the central bank cut the UK's benchmark interest rate by a quarter-point to 5.5 per cent last week, amid growing concerns about a possible economic slowdown.

Responding to the likely impact of the latest pay data on the committee's future decisions, analysts Capital Economics said in a note: "Pay growth is not the MPC's only inflation concern at the moment but the continued absence of any serious inflationary threat from the labour market will nonetheless make it easier for the MPC to cut rates in response to the weakening growth outlook."