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Thursday 21 August 2014

UK unemployment unexpectedly edges up in three months to December

Published 19/02/2014 | 11:46

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A scaffolder works on a site in London January 22, 2014. REUTERS/Luke MacGregor
A scaffolder works on a site in London January 22, 2014. REUTERS/Luke MacGregor

Britain's unemployment rate unexpectedly rose in the three months to December, further supporting the Bank of England's message that it was in no rush to raise interest rates.

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The jobless rate edged up to 7.2pc in the three months to December compared with 7.1pc in the three months to November, the Office for National Statistics said on Wednesday.

The number was higher than a forecast of 7.1pc in a Reuters poll.

The release comes a week after the BoE was forced to revise its forward guidance policy due to a surprisingly fast fall in the unemployment rate.

Last Wednesday, it said it would look at a broader range of measures of slack in the economy than just the unemployment rate when considering whether to raise borrowing costs, and that it was in no rush to hike rates.

The rise could reinforce expectations that the central bank will keep interest rates at record lows for a while to make sure the recovery is entrenched before removing stimulus.

The ONS said the number of people claiming jobless benefits fell by 27,600 in January, compared with a forecast for a fall of 20,000 in a Reuters poll.

Average weekly earnings growth rose by 1.1pc in the three months to December 2013 compared with the same period in 2012, the ONS said.

Excluding bonuses, average weekly earnings growth rose by 1pc by the same comparison.

That was lower than an annual inflation rate of 1.9pc in January - below the BoE's target for the first time in over four years.

Wages have struggled to keep pace with inflation even as Britain's economy in 2013 posted its fastest growth since the financial crisis.

The lag has squeezed household incomes, a key engine of growth, casting falling living standards as a key political issue before the 2015 elections.

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