Unemployment in the United Kingdom fell to 7.8 percent in the three months ending in November, down from 7.9 percent in the quarter through October as more people got part-time work — but full-time employment fell in a sign of continued economic weakness.
The 7.8 percent rate matched the unemployment level in the June-August quarter, the Office for National Statistics said Wednesday.
The continuing high unemployment rate, combined with Tuesday's report of a record one-month jump in inflation, underline the fragility of an economy struggling to emerge from the deepest recession since 1921.
The number of people in full-time employment fell by 113,000 while there were 99,000 more part-time workers for a total of 7.71 million, a record high. The number claiming jobless benefits fell by 15,2000 to 1.61 million.
"While the economy seemingly returned to growth in the fourth quarter of 2009, we suspect that the recovery will be prone to losses of momentum and that activity will not be strong enough overall in 2010 to prevent further net job losses," said Howard Archer, economist at IHS Global Insight.
The first official report of fourth-quarter GDP is due on Jan. 26.
The employment data came a day after the statistics office reported one-month increase in consumer price inflation, from an annual rate of 1.9 percent in November to 2.9 percent in December. Much of the increase was attributed to one-off effects including a sales tax cut a year earlier when oil prices were also slumping.
The Bank of England's governor, Mervyn King, said Tuesday that he expected inflation to pick up markedly in the first half of the year, but that it would drop back below the official target of 2 percent or less in the medium term.
Economist Vicky Redwood at Capital Economics said the employment report suggested that the labor market recovery remained fragile.
"We still think that the labor market is likely to relapse this year and undermine the economic recovery — which in turn is likely to dampen talk of interest rate rises this year," Redwood said.
That fear of a relapse was shared by the Bank of England's rate-setting Monetary Policy Committee, according to minutes of its latest meeting released Wednesday.
The MPC noted that part-time working had increased during the recession, and it said there was "a risk that the labor market could deteriorate further."
The committee, meeting on Jan. 6-7, voted unanimously to hold the base interest rate at a record-low 0.5 percent and not to increase its economic stimulus program of "quantitative easing," or inflating the money supply through asset purchases, beyond the current authorization of 200 billion pounds ($330 billion).
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