A bigger-than-expected decline in jobless claims as well as a fall in unemployment indicate that the U.K. economy is recovering as suggested by recent economic data.
The number of people claiming unemployment benefits decreased by 8,600 in May from April, the Office for National Statistics reported Wednesday. It was sharper than the expected drop of 5,000.
The claimant count totaled 1.51 million in May, while the rate remained unchanged at 4.5 percent as expected by economists.
Looking ahead, Vicky Redwood at Capital Economics said the labor market tends to be a relatively lagging indicator, so there could be further improvement in jobs growth in the coming months as the recent pick-up in economic activity feeds through.
The number of unemployed decreased by 5,000 in the three months through April to 2.51 million, leaving the jobless rate at 7.8 percent of the economically active population. The rate also matched economists' expectations.
At the same time, there were 29.76 million people in employment, up 24,000 from the November to January period.
However, as the employment generation in the private sector may not be enough to offset job cuts in the public sector, unemployment could edge up gradually to stand around 2.65 million in early 2014, IHS Global Insight's Chief U.K. Economist Howard Archer said.
According to the Report on Jobs published by the Recruitment and Employment Confederation and KPMG, permanent job placements rose to a six-month high, while the availability of candidates to fill permanent job vacancies declined in May.
ONS data today showed that average earnings improved in the three months through April, but it is still well below the inflation rate and constrain consumer spending.
Including bonus, average weekly earnings gained 1.3 percent from a year ago, much faster than the expected 0.2 percent increase. Excluding bonus payments, it rose by 0.9 percent comparing February to April with the same period a year earlier.
The increase in total pay reflects bonus payment by some businesses in April this year, which was paid last year in March.
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May 01, 2026 15:54 ET Central banks dominated the economics news flow this week with almost all major ones announcing their latest policy decisions and many boosted expectations for a rate hike in June. In other news, several countries released the preliminary data for first quarter economic growth. In the U.S., comments by Fed Chair Jerome Powell were also in focus as his term ends this month.