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Last Updated: Wednesday, 18 May, 2005, 09:30 GMT 10:30 UK
UK unemployment declines in 2005
A factory worker
The manufacturing sector still bears the brunt of job losses
The number of jobless people in the UK has fallen, according to the latest set of official figures.

In the three months from January to March, the government's preferred ILO measure of unemployment fell by 15,000 to 1.4 million.

On a monthly basis, the number of people out of work and claiming benefit rose by 8,100 to 839,400 in April.

Meanwhile, average earnings growth in the three months to March rose by 4.6%, down 0.1% on the previous month.

Jobs continued to be lost in manufacturing, which reached a record low of 3.23 million in the quarter to March, with 82,000 fewer people employed in manufacturing than in the same period a year ago, the figures from the Office for National Statistics (ONS) showed.

These figures to do not cover recent heavy job losses at MG Rover, IBM and Marconi.

'False alarm'

The ease in pay packet growth was due mainly to the timing of bonus payments in the financial sector, analysts said.

These figures certainly open the way for an interest rate cut in the coming months
Alan Clarke, BNP Paribas

The number of people in work was 28.61 million in the latest quarter, a rise of 87,000 on the previous three months.

However, the number of economically-inactive people increased by 14,000 to 7.86 million - representing a fifth of the working age population.

This measure includes people taking early retirement, looking after a relative or those who have given up trying to find a job.

Analysts agreed that the figures were unlikely to have an impact on interest rates.

"The jobs data are very much on the weaker side of expectations and show the threat of wage inflation pressure was a false alarm," said Alan Clarke at BNP Paribas.

"These figures certainly open the way for an interest rate cut in the coming months."

At 4.7%, the UK still has one of the lowest jobless rates in the world.

France and Germany have 9.8%, while Spain has 10.2% and the US has 5.2%.

Only Ireland, Austria and Luxembourg have lower unemployment rates.

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