LONDON: Britain's unemployment rate fell to its lowest level since late 2008 in the three months to May but pay growth was weaker than expected, official data showed on Wednesday.
The jobless rate fell to 6.5 percent between March and May from 6.6 percent a month earlier, another sign of the recovery in Britain's economy that has raised questions about how long the Bank of England can keep interest rates at their record low.
Economists taking part in a Reuters poll had expected the rate to fall to 6.5 percent.
However, pay growth continued to lag inflation, underscoring the BoE's view that the recovery can continue without risking a big pickup in price pressures.
In the three months through May, total pay including bonuses rose a yearly 0.3 percent, the weakest growth since the depths of the financial crisis five years ago, the Office for National Statistics said.
That was below a consensus forecast of 0.5 percent in a Reuters poll and down from a yearly rise of 0.8 percent in the three months to April.
An ONS official said May's earnings growth was still affected by comparisons with the same month last year when many companies made delayed payments of bonuses to help their employees benefit from a cut in income tax.
The delayed bonus effect also impacted April's earnings readings.
In the month of May alone, total pay rose by 0.4 percent, up from a fall of 1.5 percent in April, the ONS said.
Excluding bonuses, pay rose by an annual 0.7 percent in the three months through May, the slowest growth since records began in 2001, and by 0.6 percent in May alone.
Britain's ruling Conservative Party is highlighting the fall in unemployment as it tries to win over voters ahead of the May 2015 national elections. But the opposition Labour party is focusing on what it calls Britain's cost of living crisis.
Pay growth lagged inflation for most of the period since 2008 but narrowly overtook it at the start of this year and then falling back again.
Data on Tuesday showed inflation in June rose to 1.9 percent.
Wednesday's labour market figures showed the number of people in employment rose by 254,000 to 30.643 million in the three months through May.
The rise in employment was due mainly to people being hired by companies. Much of the initial recovery in the labour market, which began last year, had been due to people becoming self-employed.
The number of people claiming unemployment benefit in June fell by a bigger-than-expected 36,300 and the number for May was also revised to show a bigger fall than first reported.
The decrease in the unemployment rate to 6.5 percent took the rate further below the 7 percent which was originally the level at which the Bank of England said it would consider raising interest rates.
Unemployment then fell much faster than the BoE expected, prompting the central bank to switch to a broader, and harder-to-measure, assessment of spare capacity in the economy as its yardstick for considering a rate hike.
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