British unemployment claims fall unexpectedly

LONDON Wed Dec 12, 2012 5:12pm GMT

A man looks at adverts posted in the window of a recruitment agency in London March 14, 2012. REUTERS/Luke MacGregor

A man looks at adverts posted in the window of a recruitment agency in London March 14, 2012.

Credit: Reuters/Luke MacGregor

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LONDON (Reuters) - The number of Britons claiming unemployment benefits fell unexpectedly in November and the number of people in work hit a record high, data showed, raising prospects the labour market will support a moribund economy.

The data will give some relief to the government and policymakers struggling with an economy that only exited recession in the third quarter. Weak business surveys have raised concerns of a relapse.

"The fact that UK employment is rising, consumer confidence is up, and anecdotal evidence of retail sales haven't been too bad, offers some hope that the domestic situation in the UK is stabilising," said James Knightley at ING.

Sterling hit a five-week high versus the dollar after the data of above $1.6133 (9998 pence). FTSE 100 index remained 0.3 percent higher on the day but there was no reaction on gilt markets.

The number of people claiming jobless benefits fell by 3,000 last month and the increase in the previous month was revised down to 6,000 from 10,100, the Office for National Statistics said on Wednesday. Analysts had forecast a rise of 7,000.

On the wider ILO measure, the number of people without a job fell by 82,000 in the three months through October to 2.510 million, the lowest since March-May 2011. The jobless rate stayed at 7.8 percent, in line with forecasts.

"This is a good set of figures. What we've seen is extraordinary resilience by the private sector," Employment Minister Mark Hoban told Sky TV after the release.

Recent business surveys have showed that firms in Britain's dominant service sector increased staffing levels last month but factories reduced headcount.

A separate survey published on Monday showed British firms hired permanent staff through recruitment agencies at the fastest rate since April 2011 last month.

The number of people in work rose to 29.601 million - the highest since records began in 1971.

The positive labour market news will come as a relief for Bank of England policymakers, who decided against another cash boost for the economy last week.

Chancellor George Osborne, who has had been under pressure to ease his flagship austerity programme to reduce the budget deficit and instead stimulate growth, will be also buoyed by the data.

The ONS said the number of public-sector employees fell by 24,000 in the third quarter to 5.745 million - the lowest since the first quarter of 2002. The ONS also revised public-sector employment up by around 100,000 per quarter for recent quarters and by less for earlier years due to better data.

Britain will endure more austerity and miss a key debt-cutting goal as the economy looks set to grow far more slowly than previously thought, Osborne said last week when presenting a half-yearly budget statement to parliament.

The latest ONS data also showed that many Britons still faced a squeeze on their finances.

Average weekly earnings including bonuses grew by 1.8 percent in the three months through October. Analysts had forecast a rise of 1.9 percent. Excluding bonuses, pay increase by 1.7 percent.

Both figures were below inflation, which jumped to 2.7 percent in October.

"Such a picture is not supportive for the spending profile in the coming months as households remain under pressure in the current uncertain environment, even if labour markets remain resilient," said Annalisa Piazza at Newedge Strategy.

(Reporting by Olesya Dmitracova and Jonathan Cable; Editing by Jeremy Gaunt)

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Comments (2)
VastGsm wrote:
I believe the rise in unemployment is down to the increase in extra staff hired for the festive period no other reason. Watch the figures drop towards the end of January. Also how many of them statistics include those that was in receipt of benefits that then had their benefits suspended due to sanctions. I bet they was not accounted for was they? Also what happens to families that have been issued a sanction and can no longer support their families financially? I bet the knock on affect would be an increase in more crimes!

Dec 12, 2012 2:11pm GMT  --  Report as abuse
VastGsm wrote:
All the government is doing is just juggling figures ie: 10 million claiming benefits, 2 million are sanctioned, now making it look like only 8 million people are in receipt of benefits which makes it look like 2 million people that are now no longer in receipt of benefits now appear to be work well guess what there NOT! Maybe a small percentage are but rest assured a vast majority will now be living in poverty. I remember a few years ago a programme on the TV where an MP would live on benefits for a few weeks to see how they survive on the other side. Guess what the results were. A statement from the MP saying It’s not easy living on the side and I can understand the financial strain on these people trying to make ends meet. Well, on that note, I challenge George Osborne and other MP’s to live on benefits for a year and see if they can survive.

Dec 12, 2012 2:20pm GMT  --  Report as abuse
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