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Carney's promise of rise in interest edges closer as unemployment falls

The promise made by Bank of England governor Mark Carney (pictured) to raise interest rates once unemployment levels fall below 7% edged closer today, as unemployment fell again.

In August Carney pledged not to consider raising interest rates until the jobless rate has fallen below 7%.

Figures published today by the Office of National Statistics (ONS) showed unemployment levels fell to 7.7% in the three months to August. This is down 0.1% from March to May 2013 and 0.2% a year earlier.

There are now 2.49 million unemployed people in the UK.

The ONS figures also showed average total pay (including bonuses) rose 0.7% in the three months to August, compared with the same period in 2012.

The employment rate for 16-24-year-olds was 71.7% for June to August 2013, up 0.3% from March to May 2013.

Tom Lovell, group managing director of recruitment firm Reed, told HRmagazine: "The figures don't surprise me as we're seeing vibrant job activity in all regions of the UK, and I'm confident this will continue.

Lovell added: "The most buoyant sectors are construction and property, manufacturing and retail."

However, Bernard Brown, partner and head of business services, KPMG, warned that with prices rising faster than wages, employers face a "very real problem".

"They now face the conundrum of trying to attract the best people without always being able to afford to pay market rates. If this situation continues it is entirely possible that disillusioned job hunters will stop their search bringing the recent rise in employment to a halt."