UK unemployment total falls to 2.58m

Stephanie McGovern visits a distillery in Fife to get a taste of the Scottish economy

The number of people out of work fell by 65,000 to 2.58 million in the three months to May, according to the Office for National Statistics.

The unemployment rate fell to 8.1% in the period, down from 8.3% in the previous quarter.

However, the number of people claiming Jobseeker's Allowance rose by 6,100 to 1.6 million in June.

The number of people out of work for more than two years rose by 18,000 to 441,000, the highest since 1997.

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The employment figures may be lulling us into a false sense of security”

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The shadow work and pensions secretary Liam Byrne said: "You've seen another big rise in the number of long-term unemployed... nearly half the people on the dole have been out of work for more than six months."

Employment Minister, Chris Grayling said unemployment was "still much too high".

"But, I'm at least encouraged, in what are difficult times economically that we're seeing improvements, across the board."

Overall, the number of people in employment rose by 181,000 to 29.35 million.

Unemployment among 16 to 24-year-olds fell by 10,000 to 1.02 million.

The number of full and part-time self-employed people went up by 32,000 or 0.8% from the previous quarter and rose by 166,000 or 4.2% from the same period in 2011 to 4.16 million.

Average total earnings were 1.5% higher in the year to May, the ONS said. When bonuses are excluded, regular pay rose 1.8% from a year earlier.

On average, UK workers earned £442 per week excluding bonuses.

Olympics boost?

Howard Archer, an economist at IHS Global Insight said: "It is evident that restrained earnings growth as well as significant increases in part-time jobs and self-employment is helping to keep unemployment down.

UK unemployment rates

  • North East England 10.9%
  • Yorkshire and the Humber 9.7%
  • North West England 9.5%
  • Wales 9.0%
  • London 8.9%
  • West Midlands 8.6%
  • East Midlands 8.3%
  • Scotland 8.0%
  • Northern Ireland 6.9%
  • East of England 6.6%
  • South East 6.3%
  • South West 5.9%

"In addition, the imminent holding of the Olympic Games is currently providing a boost to employment," he said.

However, Peter Dixon of Commerzbank warned that it was "entirely possible that there will be a temporary boost due to Olympics, possible that there will be more to come, but if this is Olympic-related temporary hiring, it is likely to be unwound again later in the year".

On this point, the figures showed that the number of people in work in London hit a record 3.88 million, the highest level since regional employment records began in 1992.

However, as London's population has now risen to 8 million, London's unemployment rate remains relatively high at 8.9%.

Mixed picture

Roughly half of the UK's nations and regions bucked the national trend of falling unemployment.

In Yorkshire and the Humber, the unemployment rate rose to 9.7% from 9.3% in the previous quarter.

The unemployment rate also went up in Wales to 9.0% from 8.8%, and edged up to 6.9% in Northern Ireland and to 8.3% in the East of England.

In Scotland, the unemployment rate fell to 8% of the workforce from 8.2%.

The rate in the North East of England fell to 10.9% from 11.2%, but it remained the UK region with the highest unemployment rate.

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