LONDON (Reuters) – Britain’s strong labor market recovery is showing signs of cooling, even as the unemployment rate once again fell more than expected in the three months to August.
Job creation was its weakest since the spring of last year and there was a sharp slowdown in the pace at which the number of people claiming unemployment benefit is falling.
Workers’ earnings again failed to keep pace with inflation, Wednesday’s Office for National Statistics data showed, keeping falling living standards on Britain’s political agenda ahead of next May’s national elections.
The strength of Britain’s economic recovery since the middle of 2013 and its success in bringing down unemployment wrongfooted investors and the Bank of England last year.
The unemployment rate fell again to 6.0 percent between June and August, the lowest level since the three months to October 2008, the ONS said.
That was below a forecast of 6.1 percent in a Reuters poll and down from 6.2 percent a month earlier.
The BoE is watching for signs of a pickup in labor costs as it considers when to start raising interest rates. Wednesday’s figures are unlikely to change the minds of the majority of its policymakers who have voted to keep rates unchanged, especially after a sharp slowing of British inflation in recent months.
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