UK unemployment rate at lowest since 2009

Nick Palmer of the Office for National Statistics says young jobless numbers are still "fairly flat" despite a fall in wider unemployment

The UK unemployment rate has fallen to its lowest level since 2009, official figures show.

At 7.4%, this is the lowest rate since the February-to-April period in 2009, the Office for National Statistics (ONS) said.

The number of people out of work fell by 99,000 to 2.39 million in the three months to October, the ONS said.

Prime Minister David Cameron told MPs the figures showed that "the plan is working".

Mr Cameron said: "There should not be one ounce of complacency because we have still got work to do to get our country back to work and everyone back in work means greater stability for them, greater ability to plan for their future, greater help for their families.

Analysis

There are many headlines from today's labour market figures.

The rates of unemployment and those in work are the most positive in four years. The number of job vacancies is at the highest since 2008.

The vast majority of the rise in the employment total over the last year is accounted for by full time jobs, though there is still a rising number of part-timers who would rather be full-time.

Youth unemployment is still high but has fallen to its lowest rate for a year.

But much of the attention will focus on the implications for monetary policy.

The Bank of England's benchmark of 7% unemployment before interest rate rises are considered is that much closer after a fall in the rate from 7.6% to 7.4%.

The key question now is whether the 7% rate is reached before the Bank expects - possibly in the autumn of next year.

"But the plan is working, let's stick at it, and get unemployment down even further."

But Labour leader Ed Miliband, while welcoming the news, said more people are working part-time because they could not get the hours they need.

This 7.4% rate compares with a figure of 7.6% for the three months to September, and is below the rate analysts had expected.

The number of people claiming Jobseeker's Allowance in November fell by 36,700 to 1.27 million.

In Northern Ireland the unemployment rate was slightly higher at 7.5%, while Scotland's figure was 7.1.%. England and Wales matched the national figure of 7.4%.

The North East of England had the highest unemployment rate, at 10.1%, while the lowest rate was 5.6% in the East of England.

The North East also had the highest claimant count rate at 6.1%, compared with the South East, which had the lowest, at 2.3%.

Earnings pressure

Average weekly earnings growth, including bonuses, picked up by 0.9% in the three months to October compared with a year earlier, the ONS said, a slight improvement on the three months to September.

Excluding bonuses, pay grew by 0.8%.

But this is still well below the level of inflation - currently running at 2.1% - meaning that people's earnings are still falling in real terms.

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Claimant count - June 2012

The ONS data also showed that the number of people aged 16 and over who are in work was at a record high of 30.09 million, up 250,000 compared with the May-to-July period.

The percentage of the workforce in the public sector - 18.8% of those in employment, or 5.7 million people - fell to its lowest rate since the current data series began in 1999.

'Spectacular strength'

Economists welcomed the latest jobs figures.

David Tinsley, UK economist at BNP Paribas said the UK labour market was "showing spectacular strength".

David Kern, chief economist at the British Chambers of Commerce, said: "These are very strong labour market figures, which back our recent forecast of increased growth in the fourth quarter of this year."

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And Chris Williamson, chief economist at Markit, said: "The official data are now confirming the upbeat signals from business surveys, which have shown the fastest rates of job creation since the late 1990s in recent months, as firms respond to a marked pick up in demand."

The Bank of England has said it will not consider raising interest rates from their record low of 0.5% until the unemployment rate falls to 7%.

But even then, governor Mark Carney has said an interest rate increase is not guaranteed.

The pound jumped against both the dollar and euro after the release of the jobs figures, as expectations rose that UK rates could rise sooner than forecast

The Bank's nine-member Monetary Policy Committee (MPC) was unanimous in voting to keep interest rates on hold, minutes from its December meeting revealed, and to leave the central bank's £375bn programme of quantitative easing unchanged.

The MPC believes inflation could fall to its target level of 2% early in 2014, the minutes show, but it is concerned that sterling's recent 2% rise against other currencies could jeopardise the UK's economic recovery.

The UK grew by 0.8% in the third quarter of 2013, and the Bank is forecasting growth of 2.8% next year.

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