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A man uses the Job Point computer system to search for employment at a Job Centre Plus office near Manchester, northern England, in this file photo. (PHIL NOBLE/REUTERS)
A man uses the Job Point computer system to search for employment at a Job Centre Plus office near Manchester, northern England, in this file photo. (PHIL NOBLE/REUTERS)

U.K. unemployment falls to 2.61 million Add to ...

Unemployment in the U.K. fell by 51,000 to 2.61 million in the three months from February to April as the labour market continued to hold firm despite the double-dip recession.

But in a possible sign of future increases, the more timely claimant count - a measure of those claiming jobseeker’s allowance - rose by 8,100 in May to reach 1.6 million, after a revised fall of 12,800 in April. Economists had expected a small fall.

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The number of people in work grew by 166,000 to 29.28 million on the previous quarter, the largest increase for 17 months, as the private sector created five times as many jobs as the public sector lost. Half the new jobs were full-time.

The unemployment rate was 8.2 per cent of the workforce, unchanged from January-March and in line with economists’ forecasts. It was identical to the US rate and below the eurozone’s 11 per cent.

This was the third month in succession in which unemployment has fallen despite the chill winds from the eurozone, but many economists expect it to rise over the coming months if economic growth does not pick up.

Chris Grayling, employment minister, said: “Any fall in unemployment is very welcome but I remain cautious over the next few months, given the continuing economic challenges we face.”

The number of people unemployed for more than six months rose by 49,000 to 1.41 million, the highest level since 1995.

Employment in the private sector grew by 205,000 in the quarter to April, while public sector unemployment fell by 39,000 to 5.9 million, the lowest figure since 2003.

The rise was split between an increase of 82,000 in full-time workers and 83,000 in part-timers. Those working part-time because they could not get a full-time job reached 1.41 million.

Self-employed people increased by 84,000 to 4.17 million, the highest level since comparable records began in 1992.

Unemployment among 16- to 24-year-olds was down 29,000 to 1.01 million. Men accounted for most of the fall in unemployment and rise in employment.

Andrew Sissons, of The Work Foundation think-tank, said there were three possible explanations for the “baffling” trend of unemployment falling in the absence of an economic recovery.

“First, the good news on jobs may be a temporary blip, and we may see unemployment rise sharply later in the year. Second, the GDP figures may be underestimating the performance of the economy, and may eventually be revised upwards.

“Third, and perhaps most worrying, it is possible that we are seeing a transition to a lower wage economy, in which jobs bounce back, but at a lower level of pay and productivity.” It was too early to tell which outcome was correct, he added.

The squeeze on incomes eased a little as average earnings, including bonuses, rose 1.4 per cent on a year earlier, up 0.5 percentage points on the three months to March. Excluding bonuses, the increase was 1.8 per cent, up 0.2 points.

North-east England had the highest unemployment rate, up 0.5 points at 11.3 per cent, followed by London, down 0.5 points at 9.7 per cent. The lowest was south-west England, down 0.2 points at 6.1 per cent.

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