The UK jobless rate dropped to its lowest level in 42 years and wage growth remained subdued during the three months ended July, official data showed Wednesday.
The jobless rate fell to 4.3 percent, the lowest since 1975, the Office for National Statistics said. Economists had forecast the rate to remain unchanged at 4.4 percent.
The number of unemployed decreased by 75,000 from the three months to April to 1.46 million in the May to July period.
At the same time, the employment rate was 75.3 percent, the highest since records began in 1971.
Average earnings including bonus climbed 2.1 percent from the previous year, the same rate as in the second quarter, but slower than the expected rate of 2.3 percent. In the same period, real pay fell 0.4 percent from last year.
At 2.9 percent, inflation rose to a more than five-year high in August on clothing and petrol prices.
Although the unemployment rate fell even further below the Bank of England's estimate of the equilibrium rate, wage growth continues to be disappointingly flat, Andrew Wishart, an economist at Capital Economics, said.
While some policymakers are clearly close to the limit of their tolerance of higher inflation, the weakness of wages growth seems likely to maintain the reluctance of the majority of members to add to households' pain by raising interest rates in the very near term, the economist added.
At its September meeting, the BoE is widely expected to maintain its interest rate at a record low 0.25 percent and asset purchase programme at GBP 435 billion.
In August, the claimant count held steady at 2.3 percent, ONS said. The number of people claiming unemployment benefits fell 2,800 after declining 2,900 in July.
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