UK unemployment declines to fresh 11-year low in May

Labor market in the United Kingdom continued to strengthen with the unemployment rate declining to fresh 11-year low during the month of June. However, the data includes the period prior to UK’s decision to exit the European Union.

The unemployment rate fell to 4.9 percent in the three months through May, the lowest since the third quarter of 2005, data released by the Office for National Statistics in London showed Wednesday. According to a median estimate compiled from Bloomberg’s survey of few economists, the country’s jobless rate was expected to have stayed at 5 percent. Further, the number of people in work rose 176,000, the most this year, to a record 31.7 million.

Wages showed a mixed movement with basic pay growth unexpectedly slowing to 2.2 percent from 2.3 percent and total earnings increasing to 2.3 percent, up from 2 percent. However, all data were collected before June 23, meaning they do not reflect any impact on the economy from the Brexit vote.

Joblessness in the UK dropped by 54,000 to 1.65 million in the latest three months. In May alone, the jobless rate was at 4.8 percent. Jobless benefits, a narrower measure of unemployment, rose 400 in June and the rate was at 2.2 percent. In May, claims increased 12,200 instead of the 400 drop previously estimated.

Meanwhile, consumer and investor sentiments have been dampening since the rumors of Brexit turned into reality, forcing Bank of England officials to re-think whether they need to provide a fresh round of stimulus to the sickening economy.