The latest figures from the Office of National Statistics show that the level of unemployment has fallen to 2.12 million, which is the lowest it has been since early 2008. The unemployment rate has also continued to drop from 6.6% to 6.5%. This is mirrored by an employment rate of 73.1%, which is equal to the record rate from 2005 according to Prime Minister David Cameron.
The ONS has also announced that more than 4.5 million people are now self-employed, which is the highest rate since records began in 1992 with the number increasing by 404,000 between March and May.
However, the rise in employment itself is mainly attributed to people being hired by companies, unlike at the beginning of the year, where self-employment was the prime contributor.
Currently wage growth is lagging behind with average wages, including bonuses at 0.3% higher than a year ago, while the CPI inflation rate for the same period was 1.5%. However, it is believed that this slow wage growth cannot continue while unemployment continues to fall, as a smaller pool of workers can demand higher wages.
Robert Wood, a UK economist at the investment bank Berenberg said “wage growth remains weak, but that cannot last much longer with unemployment falling this fast. We look for a Bank of England rate hike in November”.
The consequences of this decreased unemployment rate should follow through in the latter half of this year and hopefully help in increasing wage growth to help strengthen the recovering economy.