Drop in jobless rate points to rebound in Britain

British unemployment fell to the lowest in six years, indicating continued strength in the labour market that Bank of England governor Mark Carney says will eventually boost earnings.

The jobless rate based on International Labour Organisation methods dropped to 6.2 per cent in the three months to July from 6.4 per cent, a bigger decline than economists forecast. A separate measure for August put the claimant count rate at 2.9 per cent. Both are at their lowest since 2008.

The latest evidence of the economic recovery comes a day before Scotland votes on whether to break away from Britain after more than three centuries. The weak spot in the country's labour market remains wages, with yesterday's report showing that basic pay rose an annual 0.7 per cent in the quarter to July, matching a record low.

"[Britain] is seeing a job-rich recovery driven by a boom in private-sector hiring and self-employment," said Ian Stewart, chief economist at Deloitte in London.

"Wages remain the missing link in this recovery. But with job vacancies up by 25 per cent in the past year and unemployment at a six-year low, we see earnings heading up from here."

The labour data showed that in Scotland, unemployment in the three months to July was 6 per cent, lower than Britain's average.