UK unemployment falls to five-year low

Concerns about cost of living remain as wage growth rises below inflation

In August, there was a fall of 156,000 jobs for 16 to 24-year-olds (Rex Features)

The number of people out of work in the UK fell by 133,000 to a five-year low of 2.2 million in the three months March, officials figure show.

There are now 30.4 million people in work – the highest since records began in 1971- helped by an increase in the number of self-employed workers, which accounted for 183,000 of the 283,000 increase in total employment.

Reacting to the unemployment figures, David Cameron tweeted: "There's more to do, but it's welcome unemployment is down again. More jobs means more financial security for people."

Total pay growth, including bonuses, stood at 1.7 per cent in the three months to March. However, excluding bonuses, pay grew by 1.3 per cent- below March's CPI inflation rate of 1.6 per cent- dashing hopes that the gap between wage growth and inflation is closing.

Official data shows real wages have been falling since the 2008 economic crisis, prompting an increase in the cost of living for British families. Inflation, which dents consumers' buying power, has stood above pay growth since April 2010.

"While earnings growth still seems set to trend higher over the coming months, March's data reinforces suspicion that the move upwards in earnings is more likely to be gradual than pronounced," said Howard Archer, chief UK economist at IHS Global Insight, who described the figures as "disappointing" for consumer purchasing power and weaker than expected.

The number of people claiming unemployment benefits fell by 25,100 - less than expected - to 1.12 million in April.