UK jobless rate unexpectedly drops to 5.4%, least since 2008

UK unemployment fell to its lowest rate since mid-2008 in a sign that the labour market is withstanding strains from the global economy. The jobless rate fell to 5.4% between June and August from 5.5% in the previous three months, the Office for National Statistics said Wednesday in London. Economists in a Bloomberg News survey forecast no change. Pay growth excluding bonuses slowed to 2.8% from 2.9%. With no inflation, Britons are enjoying the strongest growth in real incomes since before the financial crisis. Adjusted for prices, wage growth held at 2.7% in the latest three months. That may boost consumer spending, while the lack of price pressure in the economy leaves Bank of England officials room to keep interest rates at a record low. The number of people in work rose 140,000 to 31.1 million in the latest three months. Unemployment fell 79,000 to 1.77 million. Claims for jobless benefits, a narrower measure of unemployment, rose for a second month in September, climbing 4,600 from August. The rate held at 2.3%. Pay growth including bonuses rose to 3% from 2.9%. An unexpected drop in inflation below zero in September has raised the prospect of a further increase in living standards. The BOE expects price growth to stay below 1 percent until the spring of 2016, below its 2% target. (By Jennifer Ryan/Bloomberg)