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UK unemployment lowest in over 40 years

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Britain has logged a decent drop in joblessness for the first three months of the year, sending the unemployment rate down to levels not seen in decades. The pro-Brexit vote seems to leave the labor market unfazed.

Ahead of the June 8 national election, unemployment in the UK dipped again in the first quarter, the Office for National Statistics (ONS) reported Wednesday.

It said the jobless rate dropped to 4.6 percent in line with the calculation criteria set by the International Labor Organization (ILO), marking the lowest level in almost 42 years.

Economists viewed the figure as a sign that the British economy had been doing more or less fine since the countrys vote to leave the European Union.

Inflation eats into wages

But official data also showed that British pay growth lagged inflation for the first time in two and a half years.

Excluding bonuses, earnings rose by 2.1 percent at the beginning of 2017 year on year. This meant that wages adjusted for inflation actually dropped by 0.2 percent in the first three months, the first fall since the third quarter of 2014.

So far, the central bank believes there is still little pressure on most employers to raise pay sharply which it says could trigger a more permanent inflation problem.

Britains opposition Labour Party has made weak wage growth one of its main themes ahead of the June election, which opinion polls suggest Prime Minister Theresa May is on course to win.

hg/jd (Reuters, ONS)
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