This article is from the source 'independent' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.independent.co.uk/news/sharp-fall-brings-jobless-total-close-to-bank-figure-that-heralds-interest-rate-increase-9076709.html

The article has changed 7 times. There is an RSS feed of changes available.

Version 3 Version 4
Unemployment: Fall in jobless total is second biggest on record, renewing speculation about rise in interest rates Unemployment: Fall in jobless total is second biggest on record, renewing speculation about rise in interest rates
(about 3 hours later)
Unemployment fell to its lowest figure for almost five years today, prompting renewed speculation about a rise in interest rates. Unemployment has fallen to its lowest figure for almost five years, but the drop is unlikely to trigger an early rise in interest rates.
The number of jobless dropped by 167,000 in the three months to November to 2.32m, the second biggest fall on record.  The unemployment rate fell to 7.1 per cent, close to the 7 per cent at which the Bank of England will consider an increase in interest rates. The number of jobless dropped by 167,000 in
However, the Bank is expected to "move the goalposts" next month by changing its strategy so that it takes account of other factors. the three months to November to 2.32m, the second biggest fall on record. The unemployment rate fell to 7.1 per cent, close to the seven per cent at which
Today's figures showed that average wage growth has remained at 0.9 per cent - well below the 2 per cent level of inflation - and the Bank is under pressure to consider using pay growth as an additional threshold for its interest rates policy. the Bank of England will consider an increase in interest rates.
Ministers welcomed the faster than expected fall in unemployment. The quarterly fall of 167,000 is the biggest since the autumn of 1997 and the second largest since records began in 1971. he number of people in work reached a record high of just over 30m, giving an employment rate of 72.1 per cent, an increase of 0.5 per cent over the three months to November. The number claiming Jobseeker's Allowance in December fell by 24,000 to 1.25m. However, the Bank is expected to “move the
David Cameron and Ed Miliband clashed over the statistics in the Commons, after the Labour leader accused the Prime Minister of being "complacent" about wages figures which, he claimed, showed that  working people are more than £1,600 a year worse off on average under the Coalition. At Prime Minister's Questions, Mr Miliband said it was "scandalous" that a majority of 13m people living in poverty are in work rather than jobless. goalposts” next month by changing its strategy. The threshold may be cut
to 6.5 per cent and other factors may be taken into account.
Minutes of the last meeting of the Bank’s Monetary Policy Committee accepted that unemployment would
reach the threshold "materially earlier" than expected. With
inflation back to the Government’s two per cent target, the committee “saw no
immediate need to raise Bank Rate even if the seven per cent threshold were to be
reached in the near future. Consequently when the
time did come to raise Bank Rate, it would be appropriate to do so only
gradually."
Ministers hope that any interest and
mortgage rate rises will be delayed until after the general election in May
next year and some City analysts predict their wish will be granted. Howard Archer, chief UK economist at City forecaster IGS Global Insight, said:
“We believe the odds remain strongly in favour of interest rates staying at 0.5
per cent all through 2014. While rates will probably start rising in 2015, this
may still not happen until around the middle of the year.”
Dr John
Philpott, director of The Jobs Economist, said: "It's now inevitable
that unemployment will soon fall below the Bank of England's
forward guidance rate of seven per cent. However, the weakness of pay growth
suggests there is still a considerable amount of slack in the labour market which
for the time being remains an inflation free zone. Better news on jobs is no
reason for an early rise in UK interest rates."
Yesterday’s figures showed
that average wage growth has remained at 0.9 per cent - well below the two per
cent level of inflation. The Bank is under pressure to consider using pay
growth as an additional threshold for its  policy on rates.
Ministers welcomed the faster than expected
fall in unemployment. The quarterly fall of 167,000 is the biggest since the
autumn of 1997 and the second largest since records began in 1971. The number of people in work reached a record high of
just over 30m, giving an employment rate of 72.1 per cent, an increase of 0.5
per cent over the three months to November. The number claiming Jobseeker’s
Allowance in December fell by 24,000 to 1.25m.
The Bank of England says a figure of 7 per cent will not automatically trigger an interest rate riseThe Bank of England says a figure of 7 per cent will not automatically trigger an interest rate rise
David Cameron and Ed Miliband
Mr Cameron blamed the slow growth in pay on "the mess" left behind by Labour which led to the biggest recession for 100 years. He accused Mr Miliband of being "like an arsonist" who seeks out fires he started and then complains the fire brigade are not acting fast enough. clashed over the figures in the Commons, after the Labour leader accused the
Mr Miliband replied that Mr Cameron "cannot be the solution to the cost of living crisis because he just does not understand the problem." Prime Minister of being “complacent” about a fall in average wages of more than £1,600 since the Coalition was
Esther McVey, the Employment Minister, said: "With the highest quarterly fall in unemployment since 1997, it's clear that the Government's long-term economic plan to get people off benefits and into work so they can secure their future is proving successful." formed. Mr Cameron argued that this figure did not take account of
Rachel Reeves, the shadow Work and Pensions Secretary, welcomed the drop but said: " The Government should use this opportunity to tackle the unacceptably high levels of long-term unemployment and youth unemployment. More than 900,000 young people are unemployed and over 250,000 young people are long-term unemployed." increases in the personal tax allowance, insisting that take home pay rose
Dr John Philpott, director of The Jobs Economist, said: "It's now inevitable that unemployment will soon fall below the Bank of England's forward guidance rate of 7 per cent. However, the weakness of pay growth suggests there is still a considerable amount of slack in the labour market which for the time being remains an inflation free zone. Better news on jobs is no reason for an early rise in UK interest rates." faster than inflation in 2012-13. He hailed the biggest ever quarterly increase
in the number of people in work.
But Mr Miliband said it was “scandalous” that a
majority of 13 million people living in poverty are in work rather than jobless.
Mr Cameron blamed the slow growth in pay on “the
mess” left by Labour and “the longest and deepest recession in living memory.” He told Mr Miliband: "You are like an arsonist who goes around setting fire after
fire and then complains when the fire brigade aren't putting out the fires fast
enough.”
Mr Miliband replied that Mr Cameron “cannot be
the solution to the cost of living crisis because he just does not understand
the problem".