The U.K. unemployment rate held steady at the lowest level in more than 10 years and the employment rate rose to record high despite heightened uncertainty amid "Brexit" vote in June.
Data from the Office for National Statistics showed that the ILO unemployment rate came in at 4.9 percent in the second quarter, in line with expectations, and the same rate as seen in three months to May. The last time it was lower was for July to September 2005.
The employment rate was 74.5 percent in the second quarter, the highest since comparable records began in 1971.
The number of people claiming unemployment benefits decreased by 8,600 in July from June, confounding expectations for an increase of 9,000. This was the first fall in five months.
The claimant count held steady at 2.2 percent in July. The rate matched economists' expectations.
IHS Global Insight Economist Howard Archer, said data suggests that companies generally avoided a knee-jerk reaction to the leave vote by getting rid of workers, it remains likely that softening economic activity and heightened uncertainty will take a toll on the labor market over the coming months.
The solid job data should not stop the Bank of England from following through with more monetary easing, Scott Bowman at Capital Economics, said.
The Bank of England had lowered its key interest rate by a quarter point and announced additional monetary stimulus, early this month. Also, policymakers expressed willingness to take interest rates to even lower levels, but signaled that the lower bound will be above zero.
The number of unemployed people decreased by 52,000 from prior quarter to 1.64 million in the second quarter, the ONS reported. Simultaneously, employment increased 172,000 from previous three months to 31.75 million.
In the second quarter, average earnings including bonuses increased by 2.4 percent as expected and that excluding bonuses grew 2.3 percent compared with a year earlier.
by RTT Staff Writer
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