Friday 23 February 2018

Fall in jobless a sign UK economy is improving

Christina Fincher and William Schomberg

The number of Britons claiming unemployment benefit fell more than expected in May to its lowest in two years in the latest sign that the recovery is moving onto a firmer footing.

The Office for National Statistics said the number of people claiming benefit dropped by 8,600 last month, its seventh consecutive drop. Analysts had forecast a drop of 5,000.

Recent data show the economy is gathering momentum after a return to growth and Bank of England Markets Director Paul Fisher said that the second quarter "looks very good."

Still, wages are under pressure and growth may not be strong enough to deliver further significant improvements to the labor market, economists said. The number of people without a job, based on the wider ILO measure, fell by 5,000 in the three months through April to 2.51 million. The jobless rate held steady at 7.8pc, as expected.

Britain's labour market has proved resilient despite the downturn of the past few years, helped by the willingness of workers to accept below inflation wage growth.

Average weekly earnings grew by 1.3pc in the three months through April, its fastest pace so far this year but still around half the rate of consumer price inflation. In April alone earnings rose 3.3pc, helped by companies paying bonuses a month later than last year.

Wednesday's labour market data came a day after another ONS report showed Britain's industrial output rose for a third straight month in April.

A series of upbeat business surveys last week also suggested the recovery was firming.

"After being in a pretty long funk for the past couple of years there is something of an acceleration going on" in the economy, said Neville Hill, an economist at Credit Suisse and a former UK Treasury official.

Irish Independent

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