Britain enjoyed another fall in unemployment in May, but wage growth picked up again in the three months to April, official data showed today.
National Statistics said the claimant count jobless total fell by 3,200 to 976,800 last month - the lowest level since November 1975. The unemployment rate was steady at just 3.2 per cent of the workforce.
On the government's preferred Labour Force Survey measure of unemployment, which measures those out of work but not claiming benefit, the jobless rate fell to a new record low of 5.0 per cent, with the total down to 1.48 million.
But healthy demand for workers is pushing up wage costs, particularly in the public sector where there were significant rises for teachers and workers in the National Health Service.
NS said average earnings growth picked up to 5.2 per cent in the three months to April from 5.1 per cent in three months to March.
That was in line with economists' forecasts but remains well above the Bank of England's comfort zone of 4.5 per cent, although the numbers have been distorted by big bonuses in London's financial district in recent months.
But more worryingly in the latest figures was a rise in the non-bonus earnings figure to 5.3 per cent year-on-year, the highest since records began in March 1997.
The latest figures come a day after inflation data showed a surge in food prices pushed underlying inflation, which the Bank of England targets, up to a 26-month high of 2.4 per cent.
The data are likely to reinforce expectations that the bank, which has trimmed borrowing costs this year to 5.25 per cent, is unlikely to make any further interest rate cuts and that it could even raise them before the end of the year.