UK unemployment falls again

UK unemployment rate has fallen to a fresh two-year low as the service sector remains buoyant.

Data from the Office for National Statistics (ONS) showed the number of people out of work in the three months to June fell by 42,000 to 1,458,000, leaving the jobless rate at 5%.

At the same time, the overall size of the UK workforce rose to 27.9 million, its biggest since records began in 1984.

But jobs continued to be lost in the battered manufacturing sector, which fell to an all-time low of 3.5 million workers.

Rate cuts recede

The number of people out of work and claiming benefits also fell, dropping 8,800 last month to 939,200.

The consistently positive trend of the overall unemployment figure makes further cuts in interest rates far less likely.

The Bank of England cut rates to 3.5% last month, since when there has been a flood of positive data.

And inflation has taken a surprise uptick, another factor arguing against lower rates.