UK workers
The UK labour market remained in good health in May. Reuters

The UK labour market delivered good news to George Osborne, as figures released on 15 June by the Office for National Statistics (ONS) showed unemployment fell in May and the unemployment rate was the lowest since October 2005.

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According to the ONS, UK unemployment fell by 20,000 to 1.67m between February and April. The figure also represented a 148,000 decline from the corresponding period in the previous year and marked the lowest level of unemployed people since the period between March and May 2008.

Meanwhile, the unemployment rate, which measures the proportion of unemployed labour force, stood at 5%, the lowest level in almost 11 years.

The ONS added there were were 23.1m people working full-time, 304,000 more than for a year earlier and the number of part-time workers rose 157,000 to 8.50m.

The employment rate, which measures the proportion of people aged from 16 to 64 who were in work, stood at 74.2%, the joint highest since comparable records began in 1971.

The figures will provide a much-needed and timely boost for the Chancellor, who has warned the UK job market would suffer if Britain votes to leave the European Union later this month.

Analysts were almost unanimous in describing the figures as some unexpected good news amidst Brexit-related uncertainty, adding the UK labour market remains in good health despite a wider economic slowdown ahead of the referendum.

"The economy continues to add jobs, and wage growth is running ahead of consumer price inflation, which held steady yesterday at 0.3%," said Ben Brettell, senior economist at Hargreaves Lansdown.

"Today's (15 June) data will go some way to allay fears that businesses have been delaying decisions about hiring and investment until after the EU vote. Sterling strengthened after the data was released, though any gains may be tempered by continued fears the UK could vote to leave the EU next week."

Howard Archer, chief UK and European economist IHS Global Insight added: "While decent, the labour market data will likely do little to dilute belief that any interest rate hike by the Bank of England is likely to remain off the table for some considerable time to come – even if there is a vote to remain in the EU in next Thursdays referendum."