UK unemployment hits 7-year low

<p>UK unemployment has fallen to its lowest level since 2008.</p>

The jobless rate in the UK continues to improve as unemployment drops to a seven-year low.

Figures released by the Office for National Statistics (ONS), revealed that the number of people out of work fell by 76,000 to 1.84 million in the three months to February. It means that unemployment has fallen to a rate of 5.6 per cent, the lowest level since July 2008 and remains in line with forecasts.

The announcement comes as a report from EY Item Club revealed that the UK's economy is set to grow in the coming year. It stated that the nation's economy will expand by 2.8 per cent in the next 12 months and has been boosted by low inflation, tumbling oil prices and a much stronger performance from the eurozone.

Despite unemployment falling, the ONS noted that average weekly earnings remained sluggish. In the three months to February, weekly earnings, excluding bonuses, rose by 1.8 per cent compared to the same period a year earlier. When bonuses are included wages grew by 1.7 per cent.

Chancellor George Osborne hailed the figures. Speaking ahead of the International Monetary Fund's (IMF) spring meeting, Mr Osborne said: "Those forecasts have been more than reinforced by the employment figures we saw this morning, which show a record number of people in work.

"They show the claimant count at its lowest level since 1975 and they confirm that under this government two million jobs have been created. So the British economy is a job-creating machine."

Record low inflation

The ONS confirmed last week (April 15th) that inflation in the UK would remain at its record low of zero per cent. It is the second consecutive month where this has been the case and was a result of cheaper clothing and footwear, offset by a rise in petrol prices.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.