Britain's jobless rate fell unexpectedly and the number of people in work jumped in the three months to February, in a welcome sign to the government that firms are feeling more confident about hiring. The number of Britons claiming unemployment benefit ticked higher in March, but those figures are still skewed by a recent rule-change for single parents, the Office for National Statistics said on Wednesday.
The rise in employment chimes with recent surveys showing that manufacturing and services firms plan more hiring, key for the economy as the government culls hundreds of thousands of public sector jobs in a bid to cut the budget deficit. Other signs on Britain's overall performance have been mixed and Wednesday's numbers also showed wage growth slowing, highlighting the still-fragile state of the economy.
The number of people without a job on the broad ILO measure fell by 17,000 in the three months to February to 2.480 million, the ONS said. That reduced the jobless rate to 7.8 percent, below forecasts for a reading of 8.0 percent. In addition, the number of people in employment rose by 143,000 in the three months to February - the biggest increase since last September and driven by the biggest rise in the number of people in full-time employment since May 2007.
However, economists and business leaders were far from sounding the all clear as knock-on effects from the government's spending cuts could hurt sectors dependent on consumer spending. A report on Wednesday indicated there had been a big jump in the number of British companies in serious financial distress, with restaurants and the leisure industry hit particularly hard as looming public sector job cuts dent morale.
Elsewhere, online fashion firm ASOS and sportswear store operator JD Sports bucked a gloomy retail climate with strong numbers, showing there are still winners in straitened times, but JD did warn it was "extremely cautious" about prospects for the coming 12 months. The government is banking on private businesses to create new jobs to get the economy going again after a surprise contraction at the end of 2010.