The UK jobless rate declined to the lowest since 1975 at the start of the year as companies hired more staff amid robust economic activity.

The ILO unemployment rate was 4.7 percent in the three months to January versus 5.1 percent seen a year earlier and 4.8 percent in the fourth quarter of 2016, data from the Office for National Statistics showed Wednesday.

The rate has not been lower since June to August 1975. The expected rate was 4.8 percent.

At the same time, the employment rate was 74.6 percent, which was the joint highest since comparable records began in 1971.

The number of people in work increased by 92,000 from the prior quarter to a record 31.85 million.

Average earnings including bonus increased 2.2 percent in the three months to January from the prior year. This was the lowest since February to April 2016 and below the forecast of 2.4 percent.

Excluding bonus, average earnings climbed 2.3 percent. Consumer price inflation rose to a 31-month high of 1.8 percent in January. The Bank of England has forecast inflation to rise to 2 percent in the first quarter of 2017.

The labor market data shows that average earnings growth is not picking up alongside inflation, resulting in a squeeze on real wage growth, Scott Bowman, a UK economist at Capital Economics, said.

However, the tightness of the labor market - shown by the unemployment rate hitting a joint 42-year low - will push earnings growth up over the coming months, he added.

The ONS said the estimates of the claimant count has been removed from the statistical bulletin as the data may now be providing a misleading representation of the labor market.

The claimant count rate fell to 2.1 percent in February from 2.2 percent in January. The number of people claiming unemployment benefits decreased by 11,300 from January.

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