Britain's unemployment rate drops to 3.7 pct, lowest since 1974

Britain's unemployment rate fell to 3.7 percent in the first quarter of 2022, the lowest level since 1974, according to figures released by the Office for National Statistics (ONS) on Tuesday.

For the first time since ONS' records began, there are fewer unemployed people than job vacancies in the country. And both the employment and inactivity rates increased in the first quarter, said the ONS.

The employment rate increased by 0.1 percentage points in the quarter to 75.7 percent, while the economic inactivity rate also increased by 0.1 percentage points to 21.4 percent.

The labor market showed a "mixed picture," said Darren Morgan, ONS' director of economic statistics.

"Total employment, while up on the quarter, remains below its pre-pandemic level. Since the start of the pandemic, around half a million more people have completely disengaged from the labor market."

Both average total pay (including bonuses) and regular pay (excluding bonuses) increased in the first quarter of 2022, by 7 percent and 4.2 percent respectively, said the ONS.

However, soaring inflation in Britain, which hit 7 percent in March, has almost canceled out the wage rises, according to ONS figures.

Britain's cost of living squeeze looks set to continue to intensify, with inflation expected to rise further in the coming months.

The Bank of England has projected that inflation will rise further to 9 percent in the second quarter, due to the energy price cap rise in April, and then peak at slightly over 10 percent in the last quarter.