UK Unemployment Has Reached Its Lowest Level Since 1974

Official numbers released on Tuesday indicated that Britain’s unemployment rate fell to its lowest level since 1974 in the first three months of this year, at 3.7 percent, well below experts’ expectations of 3.8 percent.

In the three months to March, average wages, excluding bonuses, were 4.2 percent higher than a year earlier, above the average prediction in a Reuters poll for pay growth to remain at 4.1 percent. In the first quarter of 2022, UK unemployment plummeted to its lowest level in over half a century, with nearly a million individuals moving jobs while the number of openings surged to a record high of 1.3 million.

More Jobs than Job Seekers

The unemployment rate fell to 3.7 percent in the three months to March, the lowest since 1974, with fewer people unemployed than job vacancies for the first time in history, according to the Office for National Statistics. The number of persons jobless for six to twelve months fell to its lowest level on record. However, because of the significant number of people who claim they are neither working nor looking for employment, the UK’s workforce remains lower than it was before the epidemic. With a further rise in the rate of economic inactivity contributing to the constraints on a tight labor market, the employment rate rose to 75.7 percent, 0.1 percentage points higher than the previous quarter but still 0.9 percentage points lower than in early 2020.

The data highlight the magnitude of the issue confronting the Bank of England as it attempts to contain surging inflation as employees want pay increases to alleviate the stress on their wages. The governor of the central bank, Andrew Bailey, warned on Monday that high-earning people should “think and consider” before asking for large pay raises this year, because there’s a risk that strong wage growth may feed more increases in consumer prices, keeping inflation high for longer.