Economic boom is longest in UK history

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The Independent Online

The British economy is enjoying its longest expansion on record with unemployment falling to a 20-year low, official figures showed yesterday.

The British economy is enjoying its longest expansion on record with unemployment falling to a 20-year low, official figures showed yesterday.

As the recovery approached seven and a half years, the headline jobless rate fell to 4 per cent in December. This was the lowest since January 1980 and the first time since that unemployment in Britain has fallen below the US rate.

Steady growth in output has helped to push the jobless total lower. The level of gross domestic product did not fall in any quarter between mid-1992 and July-September 1999, and figures due later this month will almost certainly report a 30th quarterly increase at the end of last year. This is the longest recovery since the dawn of the Industrial Revolution, as far back as any available figures go.

"It is a real achievement," said Professor Nicholas Crafts of the London School of Economics. "The Victorians certainly didn't manage it. And this is an exceptionally long expansion. This is even more exceptional than the golden age of the 1950s and 60s."

Britain's achievement is not lagging far behind America's. The US expansion will also make the record books shortly when it enters its 107th month on 1 February.

Economists believe a return to full employment is in prospect as long as there are no unexpected shocks to knock the economy off course. "We can probably get back to the era of just 2 or 3 per cent unemployment," said John Philpott, director of the Employment Policy Institute.

As in America, the recent combination of growth and declining unemployment in Brit-ain has failed to send pay claims soaring.

Yesterday's figures showed underlying growth in average earnings unchanged at 4.9 per cent in December. Economists said this was probably enough to trigger a further rise in interest rates, after the quarter-point increase to 5.75 per cent earlier this month. But most experts expected much faster earnings growth.

"It has been a remarkable year in the jobs market," said Mr Philpott. "Growth did slow a year ago, but unemployment continued to fall and wages stayed under control."

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