UK unemployment rate at lowest since 2009

The UK unemployment rate has fallen to its lowest level since 2009, official figures show.

At 7.4%, this is the lowest rate since the February-to-April period in 2009, the Office for National Statistics (ONS) said.

The number of people out of work fell by 99,000 to 2.39 million in the three months to October, the ONS said.

Prime Minister David Cameron told MPs the figures showed that "the plan is working".

Mr Cameron said: "There should not be one ounce of complacency because we have still got work to do to get our country back to work and everyone back in work means greater stability for them, greater ability to plan for their future, greater help for their families.

But the plan is working, let's stick at it, and get unemployment down even further."

But Labour leader Ed Miliband, while welcoming the news, said more people are working part-time because they could not get the hours they need.

This 7.4% rate compares with a figure of 7.6% for the three months to September, and is below the rate analysts had expected.

The number of people claiming Jobseeker's Allowance in November fell by 36,700 to 1.27 million.

In Northern Ireland the unemployment rate was slightly higher at 7.5%, while Scotland's figure was 7.1.%. England and Wales matched the national figure of 7.4%.

The North East of England had the highest unemployment rate, at 10.1%, while the lowest rate was 5.6% in the East of England.

The North East also had the highest claimant count rate at 6.1%, compared with the South East, which had the lowest, at 2.3%.

Earnings pressure

Average weekly earnings growth, including bonuses, picked up by 0.9% in the three months to October compared with a year earlier, the ONS said, a slight improvement on the three months to September.

Excluding bonuses, pay grew by 0.8%.

But this is still well below the level of inflation - currently running at 2.1% - meaning that people's earnings are still falling in real terms.

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The ONS data also showed that the number of people aged 16 and over who are in work was at a record high of 30.09 million, up 250,000 compared with the May-to-July period.

The percentage of the workforce in the public sector - 18.8% of those in employment, or 5.7 million people - fell to its lowest rate since the current data series began in 1999.

'Spectacular strength'

Economists welcomed the latest jobs figures.

David Tinsley, UK economist at BNP Paribas said the UK labour market was "showing spectacular strength".

David Kern, chief economist at the British Chambers of Commerce, said: "These are very strong labour market figures, which back our recent forecast of increased growth in the fourth quarter of this year."

And Chris Williamson, chief economist at Markit, said: "The official data are now confirming the upbeat signals from business surveys, which have shown the fastest rates of job creation since the late 1990s in recent months, as firms respond to a marked pick up in demand."

The Bank of England has said it will not consider raising interest rates from their record low of 0.5% until the unemployment rate falls to 7%.

But even then, governor Mark Carney has said an interest rate increase is not guaranteed.

The pound jumped against both the dollar and euro after the release of the jobs figures, as expectations rose that UK rates could rise sooner than forecast

The Bank's nine-member Monetary Policy Committee (MPC) was unanimous in voting to keep interest rates on hold, minutes from its December meeting revealed, and to leave the central bank's £375bn programme of quantitative easing unchanged.

The MPC believes inflation could fall to its target level of 2% early in 2014, the minutes show, but it is concerned that sterling's recent 2% rise against other currencies could jeopardise the UK's economic recovery.

The UK grew by 0.8% in the third quarter of 2013, and the Bank is forecasting growth of 2.8% next year.

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David Cameron: Help to Buy triggers £1bn of new home loans

David Cameron claims that more than 6,000 people will move into their own property thanks to the Government's Help to Buy scheme, just three months after it was launched.

Nearly £1bn of home loans have been offered through the Government’s flagship Help to Buy scheme in the first three months since its introduction, the Prime Minister has claimed.

The controversial scheme, which has triggered warnings of a fresh housing bubble, has allowed more than 6,000 homebuyers to put in an offer on a property and apply for a mortgage, David Cameron said.

Those mortgages, once approved, will amount to almost £1bn of new lending, the Prime Minister said. So far 750 purchases have been completed since the initiative was rolled out in October.

“The New Year is often a time when people look to make those big life-changing decisions like moving home or taking that first step on the housing ladder,” Mr Cameron said.

“But too many people have found themselves frozen out of the market in recent years as a result of the size of the deposit required.”

Mr Cameron added: “That is why as part of our long-term economic plan we introduced the Help to Buy scheme, so hardworking people with sufficient earnings can get on, fulfil their aspirations and enjoy the security of owning their own home.”

However, Help to Buy, which offers Britons the chance to get on the property ladder with a deposit of as little as 5pc, has sparked warnings of a fresh housing bubble from economists and also Vince Cable, the Business Secretary.

Property experts have cautioned that initiatives such as Help to Buy are making it easier to purchase homes at a time when there is a shortage of new property coming on to the market.

Bodies such as the International Monetary Fund have warned the UK needs to be “vigilant” to the risks of another housing bubble and suggested the Government may need to consider other measures such as easing planning constraints to boost house building.

Downing Street insisted today that housebuilding is now growing at its fastest rate since 2008 and Help to Buy encourages “responsible lending”.

People wanting to buy a house through the scheme are, on average, seeking to buy properties worth £160,000 – below the UK’s average house price of £247,000.

Applicants face average monthly repayments of around £900 on an income of around £45,000, Downing Street said.

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