The rate of unemployment in the UK has fallen to 6.6% this month, reducing by 161,000. The was the lowest rate since January 2009. Currently, 2.16 million people in the UK are not in employment, whilst 30.5 million are in full-time employment.
The Conservative Party will see the continued strength of the UK economy as giving support to their long-term economic plan, whilst the Eurozone continues to struggle to achieve growth. Nevertheless, doubt has been cast over the strength of the UK recovery, with Rachel Reaves, the Labour shadow work and pensions minister, saying the “even people in work are struggling to make ends meet”. The prevalence of zero hour contracts has also raised concerns that it creates misleading employment figures.
The latest employment figures will provide some consolation to students at the University of York, which has one of the worst employment rates for a Russell Group university. The Sunday Times Good University Guide showed 73.9% of respondents from York were in work or further study, placing it 29th.
As the UK recovery continues there will be hopes from many of the students currently graduating that the drop in unemployment will translate into graduate jobs being made available. Student may be wise to delay their optimism, however, with the Office of National Statistics reporting a sharp drop in pay growth. The ONS has suggested that this was due to the previous year’s figures being boosted by delayed bonus payments.
The latest figures will put more pressure on Mark Carney, the Governor of the Bank of England, to raise interest rates. In his forward guidance he said that he would not consider a rate rise until unemployment was below 7%. This was achieved at the last set of results, but the Bank has delayed the rate rise to avoid a premature slowing of growth. If unemployment continues to rise without the bank taking action inflation may start to become a headache for the bank.