UK labour market exodus drives jobless rate down to 3.5%

LONDON (Reuters) -Britain’s unemployment rate fell to its lowest since 1974 at 3.5% in the three months to August, but the drop was driven by a record jump in the number of people leaving the labour market.

The number of people classed as inactive – neither in work nor looking for it – rose by 252,000 from the three months to May, the biggest such increase since records began in 1971, the Office for National Statistics said.

The Bank of England is worried that Britain’s shrinking labour market will add to inflation pressures.

Economists polled by Reuters had expected the jobless rate to remain at 3.6%.

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