United Kingdom unemployment rate drops to lowest in 42 years

The Brexit-hit pound helped drive up the cost of living

While rising inflation and the weak pound are supportive of a rise in interest rates under normal circumstances, the weakening economy and the expected slowdown in business investment preclude any hike in interest rates for the rest of the year.

On a month-on-month basis, it stated that the food sub-index increased by 2.04 per cent in April, down by 0.17 per cent points from 2.21 per cent recorded in March. British inflation is set accelerate further due the recent rebound in oil prices and the weak Sterling.

'The upward effect for transport came mainly from air fares, with a rise of 18.6% reflecting the usual pattern of increasing prices around Easter, ' it said.

Its highest rate since September 2013 and above the Bank of England's 2% target.

The ONS yesterday said that inflation hit its highest level in almost four years in April at 2.7 per cent, as sterling's weakness, electricity price hikes and rising air fares bumped up the cost of living.

KUALA LUMPUR, Malaysia-Malaysia's inflation in April eased from an eight-year high the previous month as fuel prices moderated, official data showed Wednesday. Dukascopy SA is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.

Economists taking part in a Reuters poll had predicted a rise of 2.6 percent.

Danske Bank economist Conor Lambe said inflation would continue to exert some pressure on households' spending power but he did not expect to see a huge fluctuation in the rate going forward.

Salaries were not keeping pace with inflation which was 2.3 percent in February and March, and 2.7 percent in April.

The fashion sector suffered most seeing the highest rise in prices for six years.

Downward pressure also came from prices at the pumps, with petrol falling by 1.8p to 117.4p per litre in April and diesel also dropping by 1.8p to 120.3p per litre.

The typical household will need an extra £742 a year to maintain the same standard of living they enjoyed in April 2016.

The rate of inflation is now above the Bank of England's 2.65 per cent forecast for the entirety of the second quarter of 2017.

Consumer price inflation (CPI) saw an overall slip of 2.99 per cent in April this year compared to 3.89 per cent in March.

Despite the lowest unemployment rate in more than four decades, real wages in the United Kingdom fell at their fastest rate in the first quarter of the year since 2014. This is the ONS' preferred measure of inflation but this statistic does not now meet worldwide standards.

The ONS said today that the number of unemployment benefit claimants rose by 19,400 to just under 793,000 in April, slower than an increase of 33,500 in March.



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