UK Unemployment Dips Unexpectedly in Sign of Strong Economy

  • Companies are hiring much faster than economists expected
  • Wage growth in latest quarter slowed in line with forecast
WATCH: Jefferies economist Modupe Adegbembo says wage growth is still too high for the BOE to cut rates in September.Source: Bloomberg
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UK unemployment fell unexpectedly after companies hired at the strongest pace since November, a sign of underlying strength in the economy that complicates the Bank of England’s shift toward lower interest rates.

The jobless rate fell 0.2 percentage points to 4.2% in the three months to June, the Office for National Statistics said Tuesday. Economists had expected a small increase. Employment surged by 97,000, much stronger than the 3,000 increase that forecasters had expected. Wage growth slowed in line with expectations.