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Unemployment falls to four-year low and pay increases, ONS figures reveal

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UK unemployment has fallen by 99,000 in the three months to October, to 2.39 million, according to the latest job figures from the Office of National Statistics (ONS).

The unemployment rate fell to 7.4% - the lowest rate since April, 2009. This compares to 7.6% for the three months to September 2013.

The ONS figures also showed total pay (including bonuses) rose by 0.9% between August and October 2013, compared to the same period in 2012. Regular pay (excluding bonuses) rose by 0.8%.

Reed's group managing director, Tom Lovell, told HRmagazine that as the jobs market improves employers will be under-pressure to offer better pay packages.

"The market is now opening up so employers will have to fight harder to retain their best people, this means offering better rates of pay," said Lovell. "Counter-offers will also be back on the agenda."

Lovell said there's been an increase in job availability in every sector, with construction and property enjoying the largest rise.

KPMG's Bernard Brown also believes that as more jobs become available, the UK could face a problem of employees demanding better packages, which organisations may not be able to afford.

"Confidence has clearly returned to boardrooms around the UK, with employers now determined to ensure they have enough staff in place to meet customer demand," Brown said.

"The question now, though, revolves around wages. Inflation may be falling, but with energy prices due to increase, employees will be looking at their pay packets in real terms.

"As a result employers will find it hard to attract the best people unless they can afford to offer market rates. We could find ourselves in a situation in which jobs are out there but candidates are not."