City A.M. Reporter
UK UNEMPLOYMENT hit a 12 year high of 2.26m during the three months to April, but the increase in benefit claimants in May was less than expected. <br /><br />Data from the Office of National Statistics (ONS) showed that the number of people claiming jobless benefit rose by 39,300, its lowest rate in almost a year and well below forecasts of 60,000. The total number claiming jobseeker’s allowance is now 1.554m. <br /><br />The wider measure of unemployment shot up 232,000 to 2.26m in the three months to April. This total is the highest since November 1996.<br /><br />Analysts say there could be about 3m people out of work by next year. <br /><br />Average earnings growth excluding bonuses rose by 2.7 per cent in the three months to April, its weakest rate since records began in 2001.<br /><br />Meanwhile, Bank of England (BoE)policymakers acknowledged recent data on the UKeconomy had been encouraging but stuck with gloomy projections published in May, minutes of this month’s policy meeting showed yesterday.<br /><br />The Monetary Policy Committee (MPC) meeting showed members voted to keep interest rates at a record low of 0.5 per cent and maintain the bank’s £125bn quantitative easing programme. No arguments were advanced for either increasing the pace of money creation or for scaling it back.<br /><br />“Overall, the risk of a continued sharp contraction in output in the near term had receded somewhat,” the minutes said. “However, there was no reason to conclude that the medium-term outlook for the economy, and thus inflation, had changed materially.” <br /><br />The central bank’s quarterly assessment in May suggested a painful recession in Britain would pull inflation below target for a considerable time.