UK Labor Market Continues To Recover

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The UK unemployment dropped in three months to November and employment increased reflecting continuing recovery in the labor market, the Office for National Statistics said Tuesday.

The unemployment rate dropped to 4.1 percent in three months to November, while it was forecast to remain unchanged at 4.2 percent.

The employment rate increased by 0.2 percentage points on the quarter to 75.5 percent, data showed.

The end of the furlough has been more about a fall in the supply of labor rather than a big fall in the demand for labor, Paul Dales, an economist at Capital Economics, said. As a result, the unemployment rate dropped marginally in three months to November.

During October to December, the number of job vacancies rose to a new record of 1,247,000.

In December, the claimant count declined by 43,300 from the previous month. The claimant count rate dropped marginally to 4.7 percent from 4.8 percent in November.

There were 29.5 million employees in the UK, up 184,000 on the revised November level.

Average earnings including bonus increased 4.2 percent annually in three months to November, in line with expectations. Excluding bonus, average earnings grew 3.8 percent, as expected.

Even though real wages are now falling and will decline further, the Bank of England is expected to raise interest rates from 0.25 percent to 0.50 percent on February 3 and to 1.25 percent by December, the economist said.

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