UK Unemployment Falls Despite Brexit

LONDON (AP) -- Britain's vote in June to leave the European Union did not have too much of an impact on the labor market in the first month after the decision, official figures showed Wednesday.

In the three-month period through July, the number of unemployed was 1.63 million, 39,000 lower than the previous period. The unemployment rate held steady at 4.9 percent. Overall, the Office for National Statistics said there were 174,000 more people employed, with the employment rate at a record 74.5 percent.

The figures capture around five weeks of activity in the wake of the June 23 vote to leave the EU.

Though the decision proved a huge surprise to many in the financial markets and prompted a dramatic slide in the value of the pound, the real economy has exhibited a relatively high degree of resilience. Retail sales, house prices and industrial production have all held up — to the surprise of many.

Still, economists said little can yet be read into the seeming resilience, given the lags involved between events and changes in the real economy.

"We therefore expect unemployment to rise only after a period of weaker economic activity - which might be still to come once the process of leaving from the EU really starts," said Kay Daniel Neufeld, economist at the Centre for Economics and Business Research.

The fact remains that apart from the fall in the value of the pound, which now stands at around $1.32 compared with $1.50 on the eve of the vote, nothing really has changed — Britain remains a member of the EU and has yet to trigger the so-called Article 50 that kickstarts a two-year timeframe for actual Brexit. Also the Bank of England has enacted a fresh stimulus, including cutting its main interest rate to a record low of 0.25 percent.

On Thursday, the Bank of England meets again but no changes are expected — not least because of the fairly upbeat tone of much of the economic data over the past few weeks.