Britain's Jobless Rate Rises, to 4.4%, for First Time in 2 Years

Britain's Jobless Rate Rises, to 4.4%, for First Time in 2 Years

Thursday's data comes closely on the heels of the fourth quarter labour market report, which showed the unemployment rate rising for the first time since July 2015, although the ONS attributed this to a rise in the participation rate rather than an increase in job losses.

The unexpected downward revision came after the Office for National Statistics (ONS) concluded that output from the production industries was less than previously believed.

The UK economy recorded slower-than-expected growth in the final three months of a year ago, posing fresh questions for the Bank of England as it eyes a further hike to interest rates.

The pound fell on Thursday after United Kingdom growth was revised lower by the Office for National Statistics in its second estimate of fourth-quarter gross domestic product (GDP).

The former have been constrained by a sharp rise in inflation that was due to the fall in the pound following the referendum.

Analysts said that Wednesday's data reduced the likelihood that the Bank of England would raise its main interest rate in May, as had been widely expected by markets. Statisticians said the reason why both employment and unemployment increased at the same time was that the number of people deemed to be inactive declined. This increase remained below inflation.

The number in unemployment rose by 46,000 to 1.47 million compared the previous three months.

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However, Samuel Tombs, Pantheon Macroeconomics chief United Kingdom economist, said: 'This is not an economy that needs cooling with higher interest rates.

But workers are seeing their wages increase, with average earnings up 2.5 per cent past year, according to the latest estimates. Including bonuses, the rate was unchanged at 2.5 percent.

BoE officials are likely to note pay jumping 2.8% in December alone.

Services - the biggest part of the United Kingdom economy - grew 0.6 per cent in the fourth quarter, though downward revisions to components including distribution, hotels and restaurants contributed to the revision in headline GDP. Currently, wages are growing about 2.5 percent on average against price increases of about 3 percent.

'In particular, fewer citizens of the eastern European countries that joined the EU in 2004 and of non-EU countries were in work than in the year before.

The finance ministry said Wednesday's figures were strong.

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