Jobseeker's allowance claimants drop as jobless rate falls to 7.7%

But unions not happy as yet more public sector jobs lost and more forced into part-time work

The number claiming jobseeker's allowance fell in August by 32,600 from July to 1.4 million (Martin Rickett/ PA)

In another strong indicator of the UK’s economic recovery, unemployment has dropped to 7.7 per cent, down 0.4 per cent from the same period last year.

Government figures show the total number of those without jobs dropped by 24,000 to just under 2.5 million in the three months to July, and the “claimant count” of those on jobseeker’s allowance fell by 32,600.

Despite the good news, there were concerns among unions that public sector job numbers dropped significantly, and the number of people working part-time because they are unable to get full-time work rose yet again, now at its highest level since records began in 1992.

The figures released today have taken on a new significance in recent weeks, because of the pledge by new Bank of England governor Mark Carney that lending rates will be frozen until unemployment falls to 7 per cent.

It had been predicted to take around three years, but that could now be seen as a conservative estimate.

Minister for Employment Mark Hoban said: “This is a really encouraging set of figures, with the number of people in work rocketing by 80,000 in only three months – a rise driven entirely by a growth in full-time jobs.

“The private sector has created jobs for 1.4 million more people under this government, and there are now more people employed in the private sector than ever before.

“These are all positive signs that suggest the UK economy is turning the corner.”

Mr Hoban did not address the concerns among the public sector that 34,000 jobs had been scrapped in the three months up to June. Around 21,000 jobs were lost in the NHS alone, according to TUC general secretary Frances O’Grady, who said the figures showed government cuts were “continuing to hit vital frontline services”.

“Despite the Chancellor's boasts this week, austerity is continuing to cause damage and we are far from a strong and sustained jobs recovery,” Ms O’Grady said.

“While the headline figures show small improvements, youth employment has fallen sharply and long-term unemployment is still rising. There are also still record numbers of people trapped in involuntarily part-time work with underemployment continuing to soar.”

Ms O’Grady also drew attention to the average increase in pay compared to last year, which at 1.1 per cent was far below the 2.8 per cent rate of inflation.

She said: “Across the economy ordinary people are yet to feel the benefits of tentative growth, with wages rising around three times slower than prices.”