Update: UK unemployment falls below 2m to its lowest level in eight years

Unemployment in the UK has fallen below 2million, according to new figures published today.

Unemployment in the UK has fallen below 2million, according to new figures published today. - Credit: PA

The number of people in work has reached a record 30.7million following another fall in the jobless total, official figures reveals today.

Total unemployment dipped by 154,000 in the quarter to August to 1.97 million, the lowest for eight years.

There was also an 18,600 fall in the narrower count of those eligible to claim Jobseeker’s Allowance in September to 951,900, the 23rd consecutive monthly reduction.

The UK’s unemployment rate has reached a six-year low of 6%, the Office for National Statistics (ONS) reported, with unemployment having fallen by 538,000 over the past year, the biggest annual reduction since records began in 1972.

The number of self-employed people dropped by 76,000 in the three months to August to 4.5million, but the total is still 279,000 higher than a year ago.

Self-employment now makes up almost 15% of total employment in the UK. Meanwhile, the number of employees in part-time jobs has reached a record high of 6.8 million.

Youth unemployment, covering 16-to-24-year-olds, fell by 88,000 over the quarter to 733,000, giving a jobless rate among the age group of 16%. There were 162,000 unemployed 16-and-17-year-olds, down by 11,000 on the previous three months.

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Average earnings, including bonuses, increased by 0.7% in the year to August, up by 0.1 percentage point on the previous month.

Jobseeker’s Allowance claims in Suffolk and north Essex followed the national downward trend last month.

Ipswich saw the biggest decline in Suffolk, with the count falling by 164 compared with August to 2,220 and the local unemployment rate by 0.2 of a percentage point to 2.5%.

In the Babergh district, the count fell by 44 to 567 and the rate by 0.1% to 1.1% while elsewhere in the county small falls left the local jobless rates unchanged.

This included Forest Heath, down four to 368 (a rate of 0.9%), Mid Suffolk, down 17 to 597 (1.0%), St Edmundsbury, down 20 to 800 (1.2%), Suffolk Coastal, down 30 to 541 (0.8%), and Waveney, down 37 to 1,375 (2.1%).

In north and mid Essex, the unemployment rates fell by 0.1% in Colchester, where the count was down by 61 at 1,650 (a rate of 1.4%), Braintree, down 67 to 1,317 (1.4%), and Chelmsford, down 38 to 1,561 (also 1.4%).

Smaller falls left rates unchanged in Maldon, down nine to 436 (1.2%), Tendring, down 14 to 1,966 (2.6%), and Uttlesford, down seven to 340 (0.7%).

Chief Secretary to the Treasury Danny Alexander said: “Our jobs-rich economic recovery means that Britain is fast becoming the job creation capital of the western economies. Because our recovery plan is working, so is the country and in record numbers.

“Every job created is a family made more secure and is another step towards the stronger economy and fairer society that Liberal Democrats are committed to build.”

Employment Minister Esther McVey added: “All of our reforms are focused on helping people into work and today’s record figures show that the Government’s long-term economic plan to help businesses create jobs and get people working again is proving successful.

“Behind the record figures there are countless individual stories of people turning their lives around, of families who are now feeling more secure with a regular wage, and of young people escaping unemployment and building a career.

“We know there is always more to do, which is why it is vital to stick to delivering a plan for full employment that’s creating growth and jobs.”

However, Rachel Reeves, shadow work and pensions secretary, said: “Today’s fall in overall unemployment is welcome, but the new figures show working people are continuing to see their pay fall far behind the cost of living.

“Working people have seen their real wages fall by over £1,600 a year since 2010. The Government’s failure to act on low pay has led to millions of people struggling to get by, huge additional costs in housing benefit and tax credits paid to those in work, and the OBR (Office for Budget Responsibility) warning about the impact on the public finances.”

And TUC general secretary Frances O’Grady added: “The real value of wages has fallen again this month. This is not only the longest and deepest pay cut on record but there is no end in sight.

“Detailed analysis of the figures show that even the increase in pay was entirely due to the finance and business sectors.

“With these never-ending falls in living standards and so many new jobs insecure, low-paid and self-employed, Britain’s workers have been excluded from the recovery.

“It is time to share out the proceeds of growth by creating good jobs and giving people a decent wage increase. Tens of thousands will be joining the TUC’s march on Saturday to say Britain needs a pay rise.”

David Kern, chief economist at the British Chambers of Commerce, said: “These figures confirm once again that the UK labour market remains strong. The significant fall in youth unemployment over the past year is a remarkable success story, despite the fact that it is above the national average.

“However, there are some areas of concern, such as the slowest increase in employment for 15 months, which suggests that the pace of economic growth is easing. While the fall in unemployment over the past three months was larger than the rise in jobs, this is because the number of people choosing not to seek work increased.”

Simon Walker, director general of the Institute of Directors, said: “Today’s figures are testament to the fortitude of British business, the flexibility and patience of employees and the support shown by Government in getting Britain working. A significant fall in youth unemployment is particularly encouraging.

“A relatively high level of employment during the recession was the silver lining to an otherwise very dark cloud, and we know that many businesses did all they could to keep people in work. This was complemented by an understanding among employees, many of whom accepted fewer hours or wage freezes.

“Having come through the worst of it, employers are now creating new jobs as confidence builds and the economy grows.”

John Allan, chairman of the Federation of Small Businesses, said: “Falling unemployment is good for the UK economy. Small businesses are creating new jobs, but weak wage growth is still a concern.

“Government should use the Autumn Statement as an opportunity to build on recent reforms and create the best possible environment to do business. This will enable employers to grow, pay their staff more and take on new employees.”