Unemployment falls, wages rise

UK unemployment is down and wages are up, according to the latest government figures.

The unemployment rate was 5.2 per cent for the three months to December 2007, down 0.2 percentage points over the previous quarter and 0.3 over the year.

There are now 1.61 million unemployed in the UK, a decrease of 86,000 over the year.

Wages also grew by 3.7 per cent in December, a 0.1 percentage point increase from last month, although bonuses were down.

Howard Archer, chief UK and European economist at Global Insight, said: "The December earnings data are again largely benign, indicating pay was not a major inflation threat at the end of 2007.

"This is reassuring news for the Bank of England, but the monetary policy committee (MPC) will be more interested in pay developments in the early months of 2008 to see if a still tightening labour market and higher inflation expectations are feeding through to push up pay."

According to the data, there were 677,400 job vacancies for the three months to January 2008, up 7,300 over the previous quarter and up 72,000 over the year.

But the UK-based charity Immigration Advisory Service (IAS) has claimed certain sections of the labour market - specifically curry houses - are struggling to fill their vacancies.

The IAS said there are vacancies for 27,500 workers in UK Bangladeshi-owned restaurants but the introduction of a points-based system was restricting the market and the crisis could cause "irreparable damage".

Chief executive Keith Best said: "For many low-income families the only chance they have of eating out is to go for a curry."