U.K. Unemployment Lowest Since 1975

U.K. unemployment fell more than twice as much as forecast to the lowest since 1975 in November as the strength of the economy encouraged companies to take on more workers.

Claims for jobless benefits dropped 11,100 from October to 813,000, the Office for National Statistics said today in London.

Britain's economy will expand 3.2 percent in the fourth quarter, continuing the strongest growth streak in seven years, before a ``sharp'' slowdown next year, the Bank of England forecasts. The central bank trimmed its key lending rate last month, anticipating that a surge in market borrowing costs will trigger a slump in the U.K. and weaken the labor market.

The unemployment rate as measured by International Labour Organization standards was 5.3 percent in the three months through October, the lowest since the first quarter of 2006. The rate compares with 7.2 percent in the 13-nation euro region, 4.7 percent in the U.S., and 4 percent in Japan.

London financial institutions may cut about 6,500 banking and fund-management jobs next year, and trim bonuses by 16 percent, as economic growth in the U.S. and China slows, the Centre for Economic and Business Research Ltd. said Oct. 8.

Record migration, which swelled the workforce to a record 31.6 million in September, has still kept a lid on pay.

Average earnings including bonuses rose an annual 4 percent in the three months through October, down from 4.1 percent in the period through September, the statistics office said today. Without bonuses, wage growth slowed to 3.6 percent from 3.7 percent in the third quarter.

U.K. Unemployment Lowest Since 1975

TradingEconomics.com, Bloomberg
12/12/2007 7:28:16 AM