Unemployment falls to 12-year low as jobless total is cut by 52,000

Unemployment has fallen to a 12-year low but pay growth continues to fall behind inflation, new figures show.

The jobless total was cut by 52,000 in the quarter to August to 1.4 million, the lowest since 2005, with women driving the growth in employment.

More than 32 million people are in work after a rise of 52,000, including 15 million women, with the female employment rate reaching a record 70.7%, the Office for National Statistics reported.

The female unemployment rate has reached a joint record low of 4.2%.

The number of job vacancies has increased by 3,000 to a near-record high of 783,000.

Average earnings increased by 2.2% in the year to August, unchanged from the previous month, and below the latest RPI inflation rate of 3.9% and 3% for CPI inflation.

ONS statistician Matt Hughes said: "Many labour market measures continue to strengthen.

"Employment growth in the latest three-month period was driven mainly by women, with a corresponding drop in inactivity.

"Vacancies remain robust, at a near-record level.

"On the other hand, total earnings in cash terms grew slower than prices over the last year, meaning the real value continues to fall - down 0.3% over that period."

Other data showed that the number of people classed as economically inactive fell by 17,000 over the latest quarter to 8.8 million, giving a record low rate of 21.4%.

The figure includes those looking after a sick relative, on long-term sick leave, early retirement or people who have given up looking for a job.

The UK now has an unemployment rate of 4.3%, the joint lowest since 1975.

The claimant count, which includes people on Jobseekers Allowance and the unemployment element of Universal Credit, increased by 1,700 last month to 804,000.

The increase in the employment rate for women is partly due to ongoing changes to the state pension age, resulting in fewer women retiring between the ages of 60 and 65.