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UK unemployment rate has hit its lowest rate in more than a decade but wage growth shows a slower rate than forecast.

In the three months to November, UK unemployment rate settled at 5.1%, which is its lowest rate since the three months to October 2005. This is according to the Office for National Statistics.

Over the three-month period, the number of people out of work fell to 1.68 million, showing a 99,000 fall.

However, average weekly earnings that include bonuses were up 2%, which is its slowest increase since February. This was also below the 2.1% growth forecast in a Reuters survey.

The Office for National Statistics also said that average weekly earnings growth, which does not include bonuses, slowed to 1.9%.

Employment rate hit 74%, which is the highest since records began in 1971.

Despite this, the most recent ONS figures state that almost 23 million people are now in a full-time job, which is 436,000 more than the year before. There are also 8.4 million people in part-time jobs, which is an increase of 152,000.

 

 

 

The Bank of England has cut its UK growth forecast for 2015 from 2.9% to 2.5% and for the next year, 2.9% to 2.6%, governor Mark Carney revealed in his quarterly inflation report. Despite this, the UK is still a country with one of the fastest growth rates in the developed world.

Deflation could emerge during the year, but inflation was expected to pick up towards the end of the year, Mr Carney also commented. In March, inflation was at 0% for a second month in a row, which is well below the Bank’s 2% target.

The figure marks the lowest rate of Consumer Prices Index inflation since estimates of the measure was first brought into effect in 1998. To add to this, for over six year the Bank’s base rate has been at a record low of 0.5%.

Mr Carney blamed falling inflation on a sharp fall in energy prices, decreasing food prices and strong sterling. He also said that these factors explained about three-quarters of the fall in inflation. Inflation should return to its 2% target within two years before rising above this, he said.

In terms of wage growth, the Bank lowered expectation in 2015 from 3.5% to 2.5%. The Bank did not give a positive reaction to productivity growth as it sees a disproportionate number of new jobs as low skilled and low-output. In the coming year, productivity growth is forecast to improve modestly before remaining below past average rates.