Oli Scarff | Getty Images News | Getty Images
A couple look at the job vacancies on offer in the window of the Reed employment agency in London, England.
The number of people in work rose to a record high of 32.136 million as 181,000 people gained jobs, the strongest increase since late 2015 and belying other signs of sluggish economic growth this year after last year’s Brexit vote.
The rapid job creation took the unemployment rate down to 4.3 percent from 4.4 percent.
Wages in the three months to July were 2.1 percent higher than a year earlier, little changed from previous months’ growth rates. Economists polled by Reuters had on average forecast a rise of 2.3 percent.
Excluding bonuses, which gives a better picture of the underlying trend, wage growth was also 2.1 percent versus poll expectations of a 2.2 percent rise.
With inflation hitting its joint highest level in more than five years of 2.9 percent in August, wages are failing to keep up with inflation. In real terms, wages dropped 0.4 percent in the three months to July.
Inflation has picked up sharply since the pound tumbled after last year’s vote to leave the EU, and on Tuesday Britain’s government said it would no longer limit pay rises for police and prison guards to a 1 percent cap for the public sector.
But it has made no extra money available, and public-sector trade unions are considering coordinated strike action to push for pay rises greater than inflation.
The figures are likely to complicate Bank of England policymakers’ debate over whether to support a rate rise at their monthly Monetary Policy Committee meeting later on Wednesday. The outcome of the meeting is due to be announced on Thursday.