UNEMPLOYMENT in the UK has fallen to its lowest level for two years, according to official figures. An average of1.65 million people were out of work in the three months to July, a decrease of 28,000 on the equivalent figure a month earlier.

UNEMPLOYMENT in the UK has fallen to its lowest level for two years, according to official figures.

An average of1.65 million people were out of work in the three months to July, a decrease of 28,000 on the equivalent figure a month earlier.

And the narrower count of those entitled to claim the Jobseeker's Allowance dropped for the 11th month in a row in August, falling by 4,200 to 852,900 - its lowest level since April 2005.

Local claimant counts in Suffolk and north Essex largely followed the national downward trend, although in most cases the change was so small as to leave the unemployment rate unchanged.

This was the case in Babergh, were the count fell by 17 to 635 (a rate of 1.3%), Chelmsford, down eight to 1,335 (1.3%), Forest Heath, down seven to 405 (1.0%), Maldon, down one to 533 (1.5%), St Edmundsbury, down two to 946 (1.5%) and Suffolk Coastal, down three to 688 (1.0%).

Slightly larger falls saw the rate fall by 0.1 of a percentage point in Ipswich, where the count fell by 22 to 2,342 (3.2%), and Waveney, down 44 to 2,018 (3.1%).

In contrast, the rate in Braintree increased by 0.1% to 1.6%, with the count rising by 39 to 1,318. Smaller increases left the rate unchanged in Colchester, up three to 1,700 (1.6%), Mid-Suffolk, up one to 594 (1.1%), Tendring, up 20 to 1,933 (2.6%), and Uttlesford, up seven to 325 (0.7%).

Yesterday's employment data from the Office for National Statistics also showed that wages in the public sector grew at their slowest rate for more than nine years in the three months to July.

Public sector wages rose by 2.7% during the quarter, down from 3.1% the previous month and the lowest figure recorded since May 1998.

However, overall average earnings grew by a stronger than expected 0.1% to 3.5% during the quarter, with wages in the private sector increasing by 3.7%.

Analysts suggest the data could cause an inflationary threat in the medium term, but the prospect of weaker economic growth via a softening of the housing, financial and retail markets meant that wage growth inflation was likely to be curtailed in the short term.

Jonathon Said, senior economist at the Centre for Economics and Business Research, said: “Despite the slight increase, the level of wage inflation remains well below the Bank of England's 4.5% caution area. Earnings growth is not the factor that is giving the Monetary Policy Committee sleepless nights.”