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Unemployment falls to 1.7 million | Unemployment falls to 1.7 million |
(40 minutes later) | |
Unemployment in the UK fell by 7,000 to 1.7 million in the August to October period, according to official figures. | |
The drop left Britain's jobless rate unchanged at 5.5%, the Office for National Statistics (ONS) reported. | |
The number of people out of work and claiming benefit also dropped by 5,700 in November to 950,800 - its sharpest fall since January 2005. | The number of people out of work and claiming benefit also dropped by 5,700 in November to 950,800 - its sharpest fall since January 2005. |
The data suggests the labour market is in better shape than many had thought, and could point to further rate rises. | The data suggests the labour market is in better shape than many had thought, and could point to further rate rises. |
The Bank of England last week kept interest rates on hold at 5%, but many analysts predict that the cost of borrowing could rise again early next year. | The Bank of England last week kept interest rates on hold at 5%, but many analysts predict that the cost of borrowing could rise again early next year. |
Expectations of a quarter point rise in interest rates were further fuelled on Tuesday, after the key Consumer Price Index measure of inflation rose to a near-decade high of 2.7%. | |
'Heightened fears' | |
The fall in unemployment reflects a modest rise in the labour force rather than rapid job creation Geoffrey Dicks, Royal Bank of Scotland UK economist | |
Separately, the ONS said average earnings in the three months to October rose by 4.1% compared with a year ago, up from 3.9% in the three months to September. | Separately, the ONS said average earnings in the three months to October rose by 4.1% compared with a year ago, up from 3.9% in the three months to September. |
The rise in earnings during the quarter was largely driven by private sector services, the ONS said. | |
Geoffrey Dicks, UK economist at Royal Bank of Scotland, said the labour market figures were "slightly stronger than the market expected". | |
"The fall in unemployment reflects a modest rise in the labour force rather than rapid job creation," he said. | |
"The rise in earnings simply unwinds the previous month's decline and leaves earnings growth very much in the range that it has been in all year. | |
"Still, with heightened fears of a wage response to the pick-up in price inflation, any increase is bound to increase speculation of a February rate hike." | |
Employment minister Jim Murphy welcomed the latest unemployment figures, and said they showed "welfare reform in action". | |
"These figures paint an encouraging picture," he said. "The UK already has the highest employment rate in the G8, but we need to go further still." |