By Ben CollinsThe official unemployment rate has fallen to 8.7% in England and Wales from 9.4% in September, according to the Office for National Statistics (ONS).
This comes as the Bank of England announced its first rate cut in four years and the Office of Budget Responsibility said the rate could be cut even further in the coming months.
The official rate fell to 8 per cent in September and the Bank said it had begun the process of lowering its target for inflation to 0.5% by the end of the year.
The ONS said the number of people in work fell by 8,600 in September.
This was the lowest since December 2016, when the rate was cut by 1,000 to 0-1.5%.
The fall in the official rate has been blamed on the Bank’s plans to reduce the pace of its rate cut, but economists have argued that the fall is more a result of people leaving the labour market than it is a result, in part, of the Bank cutting rates.
The Bank of Scotland has said that it is reducing its rate by about 3% a year.
The Office for Budget Responsibility has also lowered its target to 0% inflation by the middle of 2019.
As of the end-March quarter, the official unemployment figure stood at 8.8% with 8,800 people out of work.
The ONS has forecast that the number will fall to 8,500 by the March 2020 quarter.
The Bank of India cut its key lending rate by 0.2 percentage points to 7.75%, with the Reserve Bank of New Zealand reducing its key rate by 2 percentage points from 6.5 to 5.5%, and the Australian Reserve Bank cutting its key interest rate by 1 percentage point to 2.5 per cent.
But the Bank has been criticised for being slow to react to a slowdown in the economic growth of the UK, where growth was 3.3% in the third quarter of this year.
The UK government has been forced to respond to the slowdown, with the Bank setting up a meeting of its policy committee, chaired by governor Mark Carney, on Thursday to discuss its response.
The British government has also indicated it will be looking at introducing a national minimum wage.
Last month, the Office on Budget Responsibility forecast that inflation would be 0.4 per cent by the April 2020 quarter, which is well below the Bank target.
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