UK unemployment falls to five-year low of 2.2m

A man walking into a Job Centre Unemployment has been falling for 12 months in a row

Related Stories

The number of people out of work in the UK has fallen by 77,000 to a five-year low of 2.24m in the three months to February, official figures indicate.

The unemployment rate now stands at 6.9% of the adult working population, the Office for National Statistics (ONS) said.

Average earnings in the three months to February grew 1.7% compared with a year earlier.

It comes as inflation was recorded to have fallen to 1.6% in March.

It is the first time since the spring of 2010 that the increase in average wages has exceeded the Consumer Price Index (CPI) measure of inflation.

It is also the first time since the recession that unemployment has fallen below 7%.

At just over 30 million, the number of people in work remained at its highest level in a generation.

The number of people claiming Jobseeker's Allowance fell by 30,400 to 1.14 million in March.

Record numbers

The jobless figure for 16 to 24-year-olds fell by 38,000 in the three months to February to 881,000, the lowest for five years.

There were 1.42 million people working part-time because they cannot find full-time work, a fall of 17,000 over the quarter, but 10,000 higher than a year ago.

And the number of people classed as self-employed rose by 146,000 to 4.5 million, the highest since records began in 1992.

Employment Minister Esther McVey said the UK is ''back on the path to prosperity''

Joe Grice, chief economic adviser at the ONS, said: "These figures - rising employment and falling unemployment and inactivity - continue the strong trend in the labour market that has been seen in recent months. Self-employment has again been a prominent growth area."

The last time unemployment stood at 2.2 million was at the height of the financial crisis in June 2009. At that time, it meant unemployment had hit a 13-year high.

Chancellor of the Exchequer, George Osborne, hailed the "strong jobs numbers" as further evidence that the coalition government's economic plan is working.

Mr Osborne said: "There are now a record number of jobs in Britain - and today we have taken a further step in meeting the ambition I have set for full employment. Every job created means another family with greater economic security and the prospect of a brighter future.

"These remain difficult times for families facing pressures on their budgets, and much work needs still to be done to build a resilient economy. But today's news supports the argument we have made all along that the only way to see rising living standards is to grow the economy"

Shadow work and pensions secretary Rachel Reeves welcomed the latest unemployment figures, but called on the government to implement Labour's proposal for a jobs guarantee to tackle help youth unemployment.

Shadow Secretary of State for Work and Pensions Rachel Reeves: ''The rising cost of living is putting huge pressure on family finances''

She added: "At long last, earnings are finally rising faster than CPI inflation when bonuses are included, but after four years when prices have risen faster than wages, there is a huge amount of lost ground to catch up.

"Working people are now over £1,600 a year worse off than when David Cameron came to office, most people are not feeling any recovery, and the link between the wealth of the nation and family finances remains broken.

"It's deeply complacent and out of touch for the Tories to try and claim this deep-seated cost-of-living crisis has suddenly been solved. Only Labour has a clear plan to earn our way to higher living standards for all, not just a few at the top."

Interest rates

At 6.9%, the unemployment rate has fallen below the threshold at which the Bank of England said last August it would consider raising interest rates under its policy of forward guidance.

But economists suggested it was still too soon to see any upward movement from the current historic low rate of 0.5%.

Howard Archer, chief UK and European economist at IHS Global Insight said it remained "more likely than not" that the Bank's Monetary Policy Committee (MPC) would hold off taking any decision on interest rates until 2015.

He added: "Not only has the Bank of England repeatedly stressed that an unemployment rate of 7% is not a trigger for an automatic interest rate hike, but it modified its forward guidance policy in February to focus on the amount of slack it considers to be in the economy, based on a broad range of indicators.

"The Bank of England will likely regard the fact that there are 1.421 million people who are working part-time because they cannot find a full-time job as evidence that there is still substantial slack in the labour market."

David Kern, chief economist at the British Chambers of Commerce, said the latest ONS figures demonstrated the resilience and flexibility of the UK labour market.

But he added: "Concerns do persist, however. The youth unemployment rate is still much too high at 19.1% and, while long-term unemployment is falling, more than 800,000 people have been unemployed for more than a year.

"These concerns aside, it is clear that the recovery is on the right track. To consolidate this, it is important that we see measures to increase productivity and firmer action on youth and long-term unemployment.

"Improved access to finance, incentives to recruit apprentices, and support for export and investment will go some way to achieving this."

More on This Story

Related Stories

More Business stories

RSS

Business Live

  1.  
    11:12: Irish mortgage arrears

    Ireland's slow recovery in the property market continues to trundle along. The number of Irish households in mortgage arrears for more than 90 days fell to 10.4% the three months to December, down from 11.2% in the previous quarter, Ireland's central bank has said. That's the lowest level since March 2012.

     
  2.  
    10:48: Co-op hires Wilko's Ellis

    The Co-operative Group is hiring Ian Ellis as chief financial officer. He joins from retailer Wilko, where he has the same role.

     
  3.  
    10:32: Currencies

    Sterling slipped against the dollar ahead of the monthly US unemployment figures out at 1330 GMT, down 0.2% to $1.5208. Richard Falkenhall, currency strategist at SEB, said: "This election is very uncertain ... we think the uncertainty created will see sterling lose ground and forecast sterling/dollar to drop below $1.50 in coming months."

     
  4.  
    10:17: Eurozone economy
    euros

    The eurozone economy gathered pace in the last three months of 2014, with Eurostat confirming its earlier estimate of 0.3% growth compared with the three months to September 30 and a 0.9% expansion compared with the same period in 2013. Germany's economy grew by 0.7% quarter-on-quarter, while France managed just 0.1%.

     
  5.  
    10:04: Mike Ashley
    Mike Ashley

    Mike Ashley is a very busy man. Too busy for the entire month of March, it seems, to appear before MPs on the Scottish Affairs committee, who want to ask Mr Ashley about the treatment of workers at the USC fashion chain owned by his Sports Direct. Fortunately chairman Keith Hellawell is able to make the time, though. The MPs would still like to know why Mr Ashley is unavailable during March.

     
  6.  
    09:43: Japan shares

    Japan's Nikkei 225 shares index closed at a 15-year high earlier on the ECB's upward revision for eurozone economic growth and the announcement that it would begin bond buying on Monday. The index rose 1.2% to close at 18,971.

     
  7.  
    09:26: Greece
    Athens

    Greece has paid the first €310m (£223m) instalment of an International Monetary Fund (IMF) loan that falls due this month. The government must pay a total of €1.5bn to the IMF this month over two weeks starting today. Prime minister Alexis Tsipras is reported to have asked for a meeting with European Commission chief Jean-Claude Juncker about the payments.

     
  8.  
    09:09: Eurozone bonds

    Government bond yields in Portugal, Italy and Spain fell to new record lows on Friday, a day after the ECB gave details of its bond-buying plans. Portuguese 10-year yields fell 12 basis points to 1.7%, while Italian and Spanish equivalents fell 5 points to 1.28% and 1.19% respectively. The ECB starts buying government bonds on Monday in a bid to boost growth in the eurozone.

     
  9.  
    Thomas Cook Via Twitter

    Dominic Walsh of The Times tweets: Question is whether, as with Club Med, Fosun has longer-term aim to use minority stake in Thomas Cook as basis for eventual full bid @walshdominic

     
  10.  
    08:47: Market update

    The FTSE 100 Index is 8 points lower at 6,953. Shares in Weir Group are the biggest riser this morning on speculation that the engineering firm may be a bid target following a recent slump in its share price.

     
  11.  
    08:31: Thomas Cook
    Thomas Cook

    Fosun, a Chinese investment firm, has bought a 5% stake in Thomas Cook for £91.9m and plans to increase its holding further. The move follows its purchase of French resort operator Club Med last month. Shares in Thomas Cook have soared 16% higher to 140p.

     
  12.  
    08:17: RBS shares

    Just worth point out that RBS shares are trading at 376.9p and the government needs to sell its stake at an average of 455p per share just to break even on the money it pumped into the bank in 2008 and 2009. Also worth mentioning: Mr Osborne may not be Chancellor after May.

     
  13.  
    08:03: RBS shares
    RBS

    George Osborne has told the Financial Times he made a mistake in not radically restructuring taxpayer-owned Royal Bank of Scotland soon after he came to office in 2010. But the chancellor says he would like to proceed "as quickly as we can to get rid of it" after the general election.

     
  14.  
    07:50: AGA profits

    AGA says operating profit stood at £9.6m, but it booked £4.1m in pensions charges, £3.3m in fair value costs relating to its stake in Fired Earth - its tiles business - leaving it with £2.2m. But that's before £1.5m in net interest charges on its pensions deficit, which doubled in the year from £35m to £72m. That brought pre-tax profits down to just £700,000, and left AGA in no position to pay a dividend. But the company does expect market conditions to improve this year.

     
  15.  
    07:39: Vodafone
    The Hoff

    Vodafone has announced a plan to introduce a mandatory minimum maternity policy in all 30 countries in which it operates. By the end of 2015, all female employees will be offered at least 16 weeks fully paid maternity leave, as well as full pay for a 30-hour week for the first six months after they return to work. David Hasselhoff, however, will not be eligible.

     
  16.  
    07:27: AGA profits
    AGA Rangemaster

    AGA Rangemaster has reported a slight fall in an annual pre-tax profit to £700,000, compared with £1.1m a year earlier. It has also announced it will not be paying a dividend to shareholders.

     
  17.  
    DFS shares Via Twitter

    Retail analyst Nick Bubb tweets: The Chairman of DFS trumpets that it stands for "Dedication, Family and Success". Or Dull Furniture Sale? ;-) @NickBubb1

     
  18.  
    07:15: DFS shares
    DFS

    Buy one, get one half price! Furniture retailer DFS has priced shares at 255p - at the lower end of expectations. The stock starts trading at 0800 today and means the company will be valued at close to £550m.

     
  19.  
    07:02: Eurozone outlook BBC Radio 4

    One thing that may help the eurozone economy is a small but significant accomplishment by the ECB that appears to have gone largely unnoticed. That was last Autumn's asset quality review of the banks, by the ECB which "gave pretty much everybody a clean bill of help", says Mr Cameron Watt. "And that's allowing banks to sell assets off their balance sheets."

     
  20.  
    Greek economy Via Twitter Adam Parsons Business Correspondent

    Former Greek shipping minister @MVarvitsiotis tells #WUTM "we'll do whatever it takes...to stay in Eurozone...leaving would be a disaster" @AdamParsons1

     
  21.  
    06:47: Eurozone outlook BBC Radio 4
    Draghi

    Mr Cameron Watt tells Today: "There is a following wind which is the lower oil price and the material decline in the currency [euro] against the dollar". He says those factors should help boost the eurozone economy, although he he sceptical that it will do as well as ECB president Mario Draghi (pictured) suggested at his press conference on Thursday.

     
  22.  
    06:35: ECB bond buying BBC Radio 4
    The EURO logo is pictured in front of the former headquarter of the European Central Bank

    We're talking quantitative easing (QE) on the Today programme and why it pushes up stock markets. And Ewan Cameron Watt, global chief investment strategist at BlackRock, explains in the most clear terms. It is all about portfolio substitution, of course. "If I buy a whole lot of bonds and give you cash, you have now have to invest that cash," he says. "You don't want to buy bonds because of [current] negative yields, so it forces you to buy riskier assets, which inflates the prices of things like equities." Simples.

     
  23.  
    06:25: Alpacas! Radio 5 live
    Alpacas

    Let's face it - alpacas are a bit weird. But farming the cuddly critters appears to appeal to some who want to escape the rat race, alpaca farmer Mary-Jo Smith tells Wake Up to Money. She says alpaca wool is strong, luxurious and "just amazing to wear". The British Alpaca Society holds its annual show in Telford this weekend.

     
  24.  
    06:15: Insurers v banks Radio 5 live

    Aviva shares ended 7% higher yesterday and Ewen Cameron Watt, chief investment strategist at BlackRock, tells Wake Up to Money it is no surprise that insurers are doing better than banks. He says operating conditions for banks are getting tougher, but some insurers are opting to join forces.

     
  25.  
    06:05: Rangers FC
    A general view of the Ibrox Stadium, in Glasgow,

    It's a big day for Rangers FC as the club holds an emergency meeting where Dave King hopes to oust the board. However, there are question marks over King - who wants to become chairman - because of his convictions in South Africa for tax offences.

     
  26.  
    06:03: Matthew West Business Reporter

    Happy Friday everyone. Don't forget you can get in touch by email at bizlivepage@bbc.co.uk or via twitter @bbcbusiness.

     
  27.  
    06:00: It's Friday Chris Johnston Business Reporter

    Good morning and welcome to the last day of the working week. US unemployment figures are set to dominate the day and are out at 13:30. We'll bring you the reaction to those numbers and all the day's other business news as well.

     

Features

From BBC Capital

Programmes

  • A cyborg cockroachClick Watch

    The cyborg cockroach – why has a computer been attached to this insect’s nervous system?

Try our new site and tell us what you think. Learn more
Take me there

Copyright © 2015 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.