UNEMPLOYMENT in Scotland has fallen to the lowest rate of the UK nations at 3.8 per cent, according to official figures.

It dropped to 0.2 per cent between May and July, down from four per cent in the previous quarter and 4.7 per cent in the same period last year.

In the latest quarter the UK unemployment rate was 4.3 per cent, with England at 4.4 per cent, Wales 4.3 per cent and Northern Ireland 5.3 per cent, said the Office for National Statistics (ONS).

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Jamie Hepburn, the Employability Minister, said the Scottish rate remained “a success story”.

“These are the latest encouraging figures for Scotland’s economy and labour market — employment has never been higher and unemployment has never been lower,” he said.

“There are now 109,000 more people in employment compared to the pre-recession peak and Scotland now has the highest employment rate in the UK.

“Our unemployment rate remains a success story, showing that the labour market remains resilient and robust.

“With the most recent GDP figures showing the Scottish economy grew nearly four times that of the UK in the first quarter of this year, today’s labour market figures are further proof that the fundamentals of Scotland’s economy remain strong, despite the challenges posed by Brexit.”

The figures showed that for all those aged 16 and over, unemployment fell by 4000 to 106,000 — while the number of people in work increased by 49,000.

For those aged between 16 and 64, unemployment fell 7000 to 102,000, with the number in work up 60,000 and the employment rate hitting a new high of 75.8 per cent.

David Mundell, the Scottish Secretary, said: “It is very encouraging that Scotland’s employment has reached a record high and that unemployment remains at a historic low. More people in work means more money in people’s pockets and that’s good news.”

The figures were also welcomed by Stuart Mackinnon, external affairs manager for the Federation of Small Businesses (FSB) in Scotland, who said: “Low unemployment is great for Scotland and good for firms that serve our local communities.

“While we know that some firms are concerned about skills and labour shortages, that shouldn’t detract from what is good news for the country.”

Royal Bank of Scotland (RBS) chief economist Stephen Boyle said: “Scotland’s job market has never had it so good, at least on these measures. And on employment and unemployment Scotland’s performance is by some measure superior to the UK’s.

“Over the year to July, the number of people in work rose by 44,000 and unemployment fell by 24,000. Perhaps most strikingly, there were 35,000 fewer people who were inactive than a year ago. While we don’t receive monthly data on wage inflation in Scotland, we know that wage growth in the UK remains muted, rising around two per cent year-on-year. An important reason for that is likely to be the increase in the number of people who are re-joining the job market from inactivity. They have boosted Scotland’s labour supply by more than one per cent in the last year.”

Liz Cameron, chief executive of the Scottish Chambers of Commerce said: “Despite the well-recorded problems of our oil and gas sector, Scotland continues to set the pace for jobs growth and diminishing unemployment in the UK, and clearly that is a strong positive amid economic uncertainty. Long may it continue.

“But we cannot be complacent about the UK or Scottish economy while real wage growth, stuck at 2.1 per cent, continues to lag inflation.”

However, Grahame Smith, general secretary of the Scottish Trades Union Congress, warned the positive news “should not be allowed to distract from the difficult conversations we need to have about our labour market”.

He said: “Real wages are consistently down, falling by 0.4 per cent this quarter, and households across the country are feeling the pinch.

“Both the UK and Scottish governments need to focus on putting money back in the pocket of workers, and the wider picture for the economy looks bleak if we continue downwards in this low pay, low growth, high debt economy.”