Britain's unemployment rate has plunged to 4% a level not seen in more than 40 years

REUTERS/Eddie Keogh

• Britain's unemployment rate drops to just 4%, the lowest level since the early 1970s.
• Economists polled in the run up to the release had expected an unemployment rate of 4.2%.
• After increasing sharply during the financial crisis, the UK's unemployment rate has been rapidly dropping for almost a decade.
• The number of people in work also increased over the three months from April to June, with 32.39 people in work.

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The rate of unemployment in the UK fell to just 4% between April and June this year, the lowest level since comparable records began in the early 1970s, according to the latest data from the Office for National Statistics, published on Tuesday morning.

The ONS said that the UK's unemployment rate, those not in work but who want a job, dropped from 4.2% over the previous period.

It had been expected to remain at the 4.2% level by economists polled in the run up to the data release.

There were 1.36 million unemployed people in the UK over the three months, the ONS said, down 65,000 from the previous data period.

More people were in work over the period, the ONS added, saying that there were 32.39 million people in the UK with jobs, an increase of 42,000.

"The number of people in work has continued to edge ahead, though the employment rate was unchanged on the quarter," senior ONS statistician Matt Hughes said in a statement.

"However, the number of vacancies is a new record high, while the unemployment rate is now at its lowest since the winter of 1974-75."

The high number of vacancies suggests that the number of Brits in employment could rise significantly in the near future.

After increasing sharply during the financial crisis, the UK's unemployment rate has been rapidly dropping for almost a decade, as the chart below illustrates:

asdfOffice for National Statistics

The UK's unemployment rate may have beaten expectations, but forecasts proved too optimistics when it came to wages, with total earnings for British workers excluding bonuses rising 2.7% as expected, but earnings including bonuses increasing just 2.4%, below forecasts.

"Average weekly earnings for employees in Great Britain in real terms (that is, adjusted for price inflation) increased by 0.4% excluding bonuses, and by 0.1% including bonuses, compared with a year earlier," the ONS said.

The pound initially spiked higher against the dollar on the data release, but quickly fell back, perhaps reflecting the weaker than expected wage growth. By 9.50 a.m. BST (4.50 a.m. ET), it was trading at $1.2775, a gain of just 0.09% on the day.

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