Unemployment in the United Kingdom decreased between March and May despite increasing evidence that the economy would have contracted for a third successive quarter in the second quarter. The upcoming London Olympics boosted employment during the period.
The ILO unemployment rate fell to 8.1 percent in March-May from a revised 8.3 percent in the three months through February, data from the Office for National Statistics revealed Wednesday. Economists had expected the rate to remain unchanged from the February quarter's original figure of 8.2 percent.
"The labour market is displaying impressive resilience given the very real likelihood that the economy suffered a third successive quarter of contraction in the second quarter," IHS Global Insight Chief Economist Howard Archer said.
"It is evident that restrained earnings growth as well as significant increases in part-time jobs and self-employment is helping to keep unemployment down."
In addition, the imminent holding of the Olympic Games is currently providing a boost to employment, he added.
The unemployment total fell to 2.58 million in the three months to May from 2.65 million in the three-month period ended February. Employment, meanwhile, increased to 29.4 million from 29.2 million.
Nonetheless, the number of persons claiming job seekers' allowance rose by 6,100 in June from a month earlier, compared to forecasts for an increase of 5,000. The claimant count rate was unchanged at 4.9 percent in June, in line with forecasts.
Total pay, excluding bonus, rose 1.5 percent year-on-year in the March-May period, close to expectations for a 1.4 percent increase. In the three-months to April, earnings grew 1.4 percent. Regular pay, excluding bonus, rose 1.8 percent on a year earlier, unchanged on the three months to April.
"Unemployment is headed higher later this year and in the early months of 2013 as a consequence of extended soft economic activity, heightened business caution, and public-sector jobs being pared substantially," Archer said.
In a report on Monday, Ernst & Young ITEM Club warned that the sluggish GDP growth may reverse the positive trend in the employment seen in the first quarter. Unemployment is expected to hit 8.6 percent by the end of the year, peaking at 8.7 percent by 2013.
Britain's Trades Union Congress on Tuesday said that long-term unemployment in the country is at crisis levels and getting worse, even as the rest of the labour market improves. "With around one in five young people neither in work or training, it's absolutely vital that the government puts in place adequate support to prevent an epidemic of long-term unemployment," TUC said in a statement.
Last month, the British Chambers of Commerce said the unemployment in the country may increase to 2.9 million in the third quarter 2013 from 2.625 million in the first quarter of 2012.
The International Monetary Fund this week sharply downgraded the U.K.'s economic growth forecast to 0.2 percent this year from 0.8 percent. The 2013 outlook was cut to 1.4 percent from 2 percent.
Bank of England boosted asset purchase by GBP 50 billion in July, while leaving the key interest rate unchanged at a record low 0.5 percent.
Close on the heels of announcing a funding for lending scheme by the Bank of England and the HM Treasury, the British government decided to provide government guarantees on around GBP 50 billion of private investment in infrastructure projects and exports, in yet another attempt to pull the economy out of recession.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.