Modest rise in UK jobless total

The number of UK workers out of a job has risen during the three months to September, but people claiming benefit remains at its lowest since 1975.

The so-called ILO survey, the government's preferred method of gauging unemployment, rose slightly by 12,000 people to 1.48 million.

This equates to a jobless rate of 5% of the workforce.

But the claimant count, of people drawing jobless benefit, fell 3,300 to 926,900, the lowest since 1975.

The Office for National Statistics (ONS) said that the rise was very small, and that the underlying trend for both the jobless total and rate remained downwards.

Analysts had expected a slightly larger fall but say the numbers have remained healthy thanks to a big increase in public sector hiring, as the government has pumped money into key public services.

'Potential wage inflation'

Average earnings increased by 3.6% in the year to September, up by 0.2% from the previous month.

But statisticians said this was mainly due to an artificially weak June number dropping out of the comparison, and probably did not indicate upward pressure on wage growth.

The number also remains well inside the Bank of England's Monetary Policy Committee (MPC) "comfort level" of 4.5%.

We have combined economic stability with policies to tackle the barriers that can prevent some individuals from finding work Minister for Work Des Browne

But Peter Dixon, economist at Commerzbank, said: "It's still a strong number. As the economy picks up, labour demand is going to pick up.

"With unemployment rate at 3% it does suggest that there's potential for wage inflation to pick up quite strongly.

"On the balance, the labour demand is still buoyant. I think that if the public sector demand remains strong and the economy continues to pick up, we will see stronger rise in wages next year."

However in another blow to manufacturing, jobs in the sector continued to fall.

Manufacturing jobs

Manufacturing jobs fell by 3.3% or 121,000 to 3.48 million in the three months to September, compared with a year earlier, the ONS said.

The announcement comes as a Confederation of British Industry (CBI) report gloomily predicted that UK manufacturing will lose another 36,000 jobs by the end of the year.

Minister for Work Des Browne said: "The UK has the highest employment rate and lowest unemployment rate of the big seven industrialised countries.

"We have achieved this through economic stability combined with policies to tackle the barriers that can prevent some individuals from finding work."