LONDON The number of Britons out of work inched down in December from the 17-year high hit in November as employment rose and firms offered more jobs.
The stabilisation in the labour market is yet another sign that Britain may have avoided a renewed slump despite an economic contraction at the end of 2011 and provides some relief for the government, which is under pressure to ease its tough austerity programme to boost the economy.
However, in a reminder that higher unemployment was still set to weigh on public finances, the number of those claiming benefit rose by 6,900 in January to 1.604 million - the highest level since January 2010, data from the Office for National Statistics showed on Wednesday.
The number of people without a job on the wider ILO measure stood at 2.671 million in the three months to December, down from the 17-year high of 2.685 million in the three months to November. However, this was still 48,000 higher than in the July-September period.
The jobless rate remained unchanged at 8.4 percent, confounding economists' forecasts for a rise to 8.5 percent.
The politically sensitive number of young people without a job ticked down to 1.038 million in the three months to December, taking the unemployment rate for 16- to 24-year-olds to 22.2 percent.
And in another sign of hope for the unemployed, the number of vacancies rose to 476,000 in the three months to January.
The government has been relying on private firms to create enough jobs to make up for the estimated 700,000 jobs it is cutting in the public sector as part of its austerity programme, aimed at erasing the country's huge budget deficit over the next five years.
Employers expanded their permanent workforce for the first time in four months in January, a survey of recruitment agencies showed last week, adding to signs that the economy may be improving.
In further good news for cash-strapped Britons, inflation dropped sharply in January.
(Reporting by Sven Egenter and Olesya Dmitracova)