Although jobless claims declined more-than-expected in April, British unemployment increased in the first quarter and wage growth was the weakest on record, dampening consumer spending.
The number of people out of work was 2.52 million in the quarter ended March, up 15,000 from October to December period, data published by the Office for National Statistics showed Wednesday.
The increase has lifted the ILO jobless rate by 0.1 percentage points to 7.8 percent in the March quarter. The rate was seen at 7.9 percent. Employment, at the same time, plunged 43,000 to 29.71 million.
IHS Global Insight Economist Howard Archer noted that unemployment will tend to rise even as an increase in private sector employment will not be enough to offset job cuts in the public sector.
He expects unemployment to trend up gradually to around 2.65 million in late-2013/early-2014, giving an unemployment rate of 8.1 percent.
By contrast, the claimant count declined notably by 7,300 in April from a month ago, far exceeding the expected decrease of 3,000. As a result, the claimant count rate fell slightly to 4.5 percent in April from 4.6 percent in March.
The number of people claiming jobseekers' allowances totaled 1.52 million.
According to the latest Report on Jobs prepared by the Recruitment and Employment Confederation and KPMG, permanent staff appointments improved for the seventh month in a row in April, while temp billings declined for the first time in nine months.
Today's data signals that the region is unlikely to see any momentum in consumer spending as wage growth is not keeping up pace with inflation.
Average weekly earnings excluding bonus payments rose 0.8 percent during January to March compared with the same period a year earlier. This was the lowest growth rate since comparable records began in 2001.
Including bonus, average weekly earnings increased 0.4 percent annually. This growth rate has not been lower since March to May 2009.
Inflation was steady at 2.8 percent in March. The Bank of England today said that inflation will move close to 2 percent target faster than earlier estimated.
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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.