SCOTLAND’S unemployment rate has fallen below the UK’s as new figures showed the fastest growth in wages across the UK for 10 years.

The Office for National Statistics said the number of people out of work in Scotland fell by 14,000 to 106,000 between June and August.

The unemployment rate fell from 4.3% to 3.9% over the period, while the UK rate fell from 4.1% to 4%, as UK unemployment fell by 47,000 to 1.36m.

Other data showed pay, excluding bonuses, rose by 3.1% over the three months to August, compared to a year ago, outstripping inflation of 2.5%.

SNP Finance Secretary Derek Mackay said: “Unemployment fell over the quarter and year and at 3.9%, Scotland’s unemployment rate is lower than the UK’s.

“There are now 132,000 fewer people unemployed in Scotland than the recession peak and we continue to outperform the UK on both employment and unemployment rates for women and young people.

“While these results show a decrease in employment, our employment rate has increased over the longer term and remains high by historical standards. We have 71,000 more people in employment compared with the pre-recession peak.

“Despite the ongoing risks posed by Brexit, our ambitious economic strategy will create the right environment for job growth.”

Employment in Scotland fell 11,000 to 2.63m, a rate of 74.9% (down 0.5% on the quarter), while economic inactivity jumped 0.9% to 22%.

Across the UK, employment fell by 5,000 people to 32.39m, a rate of 75.5% (down 0.1%), while economic activity rose by 0.2% to 21.2%.

Tory MSP Dean Lockhart said: "For all the Brexit-related scaremongering from the SNP, it appears the economy both in Scotland and the rest of the UK is performing well.

“This is in the face of an SNP government which is refusing to examine the opportunities of Brexit, and using it only to spread doom and rabble-rouse for independence.

“These figures do fluctuate, but this encouraging news at least suggests there could well be a good future for Scotland’s economy once we’ve left the European Union.”

Dr Stuart McIntyre of the Fraser of Allander Institute said UK and Scottish unemployment were are near record lows. 

He said: “Over the past year the UK as a whole showed growth in the employment rate (up 0.4 percentage points), while Scotland saw its employment rate dip (down 0.3 percentage points).

“Tying this all together is changes in economic inactivity.

“Individuals can be economically inactive for a range of reasons, from the positive (e.g. being in full time education) to the more concerning (e.g. being unable to work through being unwell).

“Over the past year we have seen Scotland’s rate of economic inactivity grow by 0.5 percentage points, reaching 22% in contrast to the UK as a whole where it is only 21.2%.

“This rise in economic inactivity in Scotland appears to be largest among females. Over the past year, economic inactivity among females has risen by 1 percentage point in contrast to a 0.1 percentage point fall in the rate of economic inactivity among men over the same period."

David Freeman, head of labour market at the ONS, said: "People's regular monthly wage packets grew at their strongest rate in almost a decade, but, allowing for inflation, the growth was much more subdued.

"The number of people in work remained at a near-record high, while the unemployment rate was at its lowest since the mid-1970s.”

Including bonuses, pay rose 2.7% in the last quarter compared to the previous year..

The Bank of England has forecast it will grow at 2.5% a year by the end of 2018, rising to 3.5% by the end of 2020.

However experts did not expect the pay growth to continue.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the upturn had been driven by the recent loosening of the public sector pay cap, but this had now peaked.

Suren Thiru, head of economics at the British Chambers of Commerce, added: “The pace at which pay growth is exceeding price growth remains well below the historic average, meaning the current squeeze on spending power is unlikely to ease.

"Achieving a meaningful improvement in wage growth will be an uphill struggle unless the underlying issues that continue to limit pay settlements are tackled - notably sluggish productivity, considerable underemployment and high upfront costs for businesses."

Scottish Secretary David Mundell said: "It is welcome news that the number of people out of work and looking for a job in Scotland has fallen.

"However, there is no room for complacency as economic activity in Scotland is falling.  The Scottish Government needs to focus on using its extensive powers and work with us on ensuring that Scotland’s economy thrives.”