Joblessness at 25-year low

Last month's economic figures were encouraging for the government with

good news on inflation, earnings and unemployment.

The key underlying inflation rate - used by the Bank of England for

setting interest rates - was unchanged in July at 2.2%, comfortably

below the government's 2.5% target.

The headline rate of inflation - which includes mortgage interest

payments - at 3.3% was also unchanged on the June figure. Rises in

seasonal food prices, due to wet weather, boosted prices in July, but

those were offset by stores cutting clothing and footwear prices in the

July sales.

Average earnings growth in the year to June slowed to 3.8% from 4.0% in

May. The less volatile three-monthly headline rate also showed earnings

growth slowing to 4.1% in the April-June period compared to 4.8% in the

March-May period.

The good news on the unemployment front came with the announcement that

the unemployment rate based on the number of claimants was 3.7% - the

lowest rate since November 1975.

The number of people unemployed and claiming benefit in the UK fell by

22,700 to just over one million in July - 1,069,800.