LONDON (ShareCast) - UK unemployment hit 12-year highs in May but fewer people than expected claimed jobless benefits.
The Office for National Statistics said UK unemployment rose to 2.26m in the three months to April, the highest since November
1996. The jobless rate rose to 7.2% in the same period but it was less than expected.
People claiming unemployment benefit rose by 39,300 in May - the smallest increase in 10 Months. It was far less than the 60,000 expected and down from the 49,600 in April. The claimant count rate for May rose to 4.8%.
Average earnings actually rose 0.8%, more than expected, in the three months to April. The ONS said this reflected the timing of bonus payments in the financial services sector.
Total employment level fell by 271,000 over the previous three months and by 399,000 over the year to reach 29.11m - the largest quarterly fall in the employment level since comparable records began in 1971.
"Despite the recent improving trend in the claimant count unemployment data, it is likely that the number of jobless still has some considerable way to rise," said IHS Global Insight economist Howard Archer.
"Even if the economy does manage to eke out some growth over the coming months, it is unlikely to be strong enough for some considerable time to come to lead to a net creation of jobs. Consequently, the economy seems highly likely to shed jobs well into 2010. Nevertheless, we now lean towards the view that unemployment is likely to peak around 3 million, rather than reach 3.3 million as we previously feared," he added.
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