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Unemployment down to 6.9% as wage growth overtakes inflation

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The unemployment rate is down to 6.9% as wage growth outpaced inflation for the first time since 2008, government figures have shown.

ONS labour market statistics for April 2014 showed unemployment dropped by 77,000 to 2.24 million between December 2013 and February 2014. This is 6.9% of the working population, down from 7.1% two months ago and 7.9% this time last year. 

Education, human health and social work had the largest increases in jobs with 191,000 new workers. This was closely followed by administrative and support work staff with 189,000 new jobs. 

As previously predicted, the rate that wages are increasing is now higher than inflation. Average pay is up 1.7% since this time last year, compared to the inflation rate of 1.6%. 

Neil Carberry, CBI Director for Employment and Skills, said the figures show the success of the flexible job market. "Firms are hiring at a faster pace, the number of people out of work is at a five-year low and the majority of new jobs are full-time," he said.

"We’ve always said that as growth picks up more people will feel the benefits. Businesses are creating jobs across all sectors and real wages in the private sector are rising.”

Ian Brinkley, chief economist at The Work Foundation, said the news was largely positive but warned that regions where growth was not as strong must not be left behind.

"London and the Greater South East continue to power ahead of the rest of the UK in terms of employment generation," he said. "Employment levels in the North East are lower today than they were at the end of the recession, measured by the workforce jobs indicator. Gaps in regional employment performance are also widening rather than narrowing.”