U.K. March Unemployment Declines Less Than Forecast


U.K. unemployment fell less than economists forecast in March as the country's job market showed signs of weakening.

Claims for jobless benefits declined 1,200 from February, the Office for National Statistics said today in London. Economists projected a drop of 1,800, according to the median of 30 forecasts in a Bloomberg News survey. Claims rose a revised 600 in February, the first increase in 17 months, after an initial reading showed they fell. Wages increased more than projected, the statistics office said.

The report adds to evidence the job market will cool this year as the global credit rout, which has already ended a decade- long housing boom, seeps into the economy. While the claimant count still fell to the lowest since June 1975 last month, Bank of England policy maker David Blanchflower said in March he expects ``some weakening'' in employment.

The pound rose 0.2 percent against the euro after the report and traded at 80.52 pence at 10:06 a.m. in London. Against the dollar, it traded at $1.9733.

Slower growth may encourage the Bank of England to ignore wage inflation and keep cutting rates. The central bank has already cut its benchmark rate three times since December, taking it to 5 percent.

For now, the job market is still adding workers. Employment rose 152,000 to 29.51 million in the quarter through February, the highest since records began in 1971, the statistics office said. The U.K. workforce grew 13,000 to 31.62 million.

The unemployment rate as measured by International Labor Organization standards fell to 5.2 percent in the quarter through February from 5.3 percent.

The rate compares with 7.1 percent in the 15-nation euro region, 5.1 percent in the U.S. and 3.9 percent in Japan. The number of unemployed fell 39,000 to 1.61 million.

 


TradingEconomics.com, Bloomberg
4/16/2008 3:47:48 PM