UK jobless rate hits lowest since 1974 as people quit labour market

Britain’s unemployment rate fell to its lowest since 1974 at 3.6 per cent in the three months to July as more people left the labour market including those classified as long-term sick as well as students, official monthly figures showed on Tuesday.

Economists polled by Reuters had expected the jobless rate to stay at 3.8 per cent.

Still, the UK Office for National Statistics said the number of people in employment grew by just 40,000 in the May to July period, less than a third of the increase expected by the economists polled by Reuters.

The economic inactivity rate — measuring the share of the population who are not in work and not looking for work — increased by 0.4 percentage points on the quarter to 21.7 per cent.

The Bank of England is worried about increasing inactivity in the labour market as it could help to fuel inflation pressures due to a lack of candidates to fill jobs. — Reuters