British unemployment falls

January 21, 2010

, LONDON, Jan 21 – British jobless claims fell in December at the fastest pace for two and a half years, data showed Wednesday, fuelling hopes that the economy emerged from a record recession in the fourth quarter of 2009.

The number of people claiming benefits slid by 15,200 to 1.61 million, which was the sharpest monthly drop since April 2007, the Office for National Statistics (ONS) said in a statement.

And in another encouraging sign, unemployment in Britain, according to the International Labor Organization measure, sank by 7,000 to 2.46 million people in the three months to November. That was the first drop since May 2008.

British Prime Minister Gordon Brown, trailing the opposition Conservatives in polls before an election due by June, hailed the news as evidence that government action had helped stop soaring unemployment.

"In the 1980s recession, unemployment kept rising for five years," Brown said Wednesday at his weekly question and answer session with lawmakers in the House of Commons.

"In this recession we have taken action so that we can see unemployment falling — and we can see the action that is helping young people into work."

The ONS added Wednesday that Britain\’s unemployment rate stood at 7.8 percent in the three months to November.

"The latest set of labour market data were surprisingly strong," said Credit Suisse economist Neville Hill.

"The claimant count measure of unemployment fell for the second consecutive month in December.

"This is a compelling sign that the labour market has turned and the economy has pulled out of recession."

Britain currently remains the last major world power mired in recession after the eurozone, France, Germany, Japan and the United States all emerged from a deep downturn that was sparked by the global financial crisis.

However, most experts expect that gross domestic product (GDP) data due next Tuesday will show the economy escaped from recession in the three months to December, growing after six successive quarters of decline.

"Today\’s labour market statistics point towards strong economic growth in the final quarter of 2009," said economists Benjamin Williamson at the Centre for Economics and Business Research, an independent consultancy.

Deutsche Bank economist George Buckley added that the data suggested that unemployment had peaked in Britain.

"This is a strong report, continuing the theme of a relatively resilient job market.

"It is looking increasingly possible that we have seen the peak in unemployment and that employment will begin rising again over the coming months."

However, on a downbeat note, energy supplier EON UK announced Wednesday that it planned to axe up to 800 jobs as the German-owned group streamlines its customer services operations in Britain.

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