More positive economic news this morning — the unemployment rate has fallen. In the last three months, unemployment has taken a surprising drop to 7.4 per cent, compared to 7.6 per cent for the three months before. As the chart below shows, the unemployment rate is now lower than at any time since the general election, and the lowest since April 2009:

The number of people claiming Jobseeekers’ Allowance is also down by 36,700 while average pay also rose by a slender 0.8 per cent compared to the previous year (still below the rate of inflation). Despite this, the figures are good news for the government. The Employment Minister Esther McVey has popped up on Sky News just now, boasting:

‘We can say today, we have hit a record high of the number of people in employment, with 30 million people in work’

Not surprisingly, @ToryTreasury has been gleefully retweeting commentators across the political spectrum welcoming the news. And so far, Ed Balls and Labour have remained silent.

As unemployment continues to fall, what will happen to interest rates? The Bank of England has previously stated interest rates will remain at the rock bottom 0.5 per cent until unemployment hits 7 per cent. But as McVey reminded us this morning, this is only in its forward guidance policy and Mark Carney said yesterday the base rates should remain at 0.5 per cent until the recovery was established.

UPDATE: Labour have woken up with a statement from Rachel Reeves this morning. Predictably, they’re going for the cost of living attack. Still nothing from Ed Balls:

‘Today’s fall in unemployment is welcome, but families are facing a cost-of-living crisis and on average working people are now £1,600 a year worse off under this out-of-touch Government.

‘Today’s figures show prices have now risen much faster than wages for 41 of the 42 months since David Cameron became Prime Minister. Youth unemployment is still unacceptably high at over 900,000 and the number of people in part time jobs who want to work full time has risen again, to a record high of 1.5 million.

Tags: ONS, UK politics, Unemployment