UK jobless total in further fall

The Office for National Statistics said unemployment dropped by 5,000 in the quarter to August to 1.65 million, continuing the downward trend.

Based on a comparable ILO measure, unemployment fell by 5,000 during the same three-month period.

Meanwhile, average earnings rose by 3.7% during the quarter, beating expectations of a 3.6% rise.

The rise was mainly spurred by increases in private sector services wages, that included bonuses in the financial sector.

'Volatility'

Recent credit jitters fears and fears of a wider economic crisis have prompted analysts to predict that the UK would leave rates on hold at 5.75% or even reduce them, rather than continue raising them.

But some analysts say the government is likely to pause in light of the latest unemployment data.

For September, the number of people claiming jobseeker's allowance dropped by 12,800, reaching a two-year low of 835,800 - its 12th fall in a row.

"The fall in the claimant count number was greater than expected, but volatility in the number isn't unknown and one would have to say unemployment is in any case a lagging indicator of economic activity," said Philip Shaw of Investec.

Minutes from the Bank of England's monetary policy committee on Wednesday showed that one member had favoured an interest rate cut, but was outnumbered by the remaining eight, who said November forecasts would give a clearer picture of the state of the economy.

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