UK unemployment falls to 2.51 million, ONS says

The number of people out of work in the UK has fallen to its lowest total for more than a year.

Unemployment fell by 49,000 to 2.51 million in the three months to September, taking the jobless rate to 7.8% from 7.9%.

The Office for National Statistics said that almost all the 49,000 fall was due to a decline in youth unemployment.

But the ONS said that the claimant count rose by 10,100 last month to 1.58 million, the highest since July.

The unemployment total is now 110,000 lower than for the July-September quarter last year, the ONS said. The number of people in work increased by 100,000 in the latest quarter to just under 30 million, a rise of more than half a million over the past year.

However, economists suggested that the figures indicated that the pace of job creation is slowing.

"The data add to recent signs from business surveys that growing uncertainty about the economic outlook is causing increasing numbers of firms to retrench and focus on cost cutting," said Chris Williamson, economist at economic research firm Markit.

Speaking at a news conference to present the Bank of England's latest economic outlook, governor Sir Mervyn King said the figures showed that the labour market was "pretty strong".

But he said it was hard to reconcile this with the weak growth in the economy.

Sir Mervyn said the economy had barely grown over the past two years and forecast that the recovery would be "subdued".

"The road to recovery will be long and winding, but there are good reasons to suggest we are travelling in the right direction," he said.

Other figures from the ONS showed that long-term unemployment - those out of work for over a year - increased by 12,000 in the quarter to September to 894,000, while 443,000 people have been jobless for more than two years, up by 21,000.

Part-time employment increased by 49,000 to 8.1 million, close to a record high, while there were 51,000 more people in full-time jobs, at 21.4 million. Unemployment among women fell by 10,000 to 1.09 million, and by 39,000 among men to 1.43 million.

Although the latest fall in unemployment was due to a reduction in youth unemployment, the ONS said that the jobless rate among 16 to 24-year-olds was still 963,000. This figure includes 315,000 unemployed young people in full-time education, the ONS said.

'Challenges'

Mark Hoban, the Employment Minister, told the BBC: "This is another good set of figures. We've seen the number of people in work increase by 100,000 and youth unemployment is below a million again."

But he insisted that there was "no room for complacency and that much hard work" remained to be done to get people back to work. "There are still some real challenges out there. We still need to tackle... long-term unemployment."

Shadow work and pensions secretary Liam Byrne said this was a particularly worrying area.

"Today's figures showed another very sharp increase in long-term unemployment, heading up now towards the million mark. That's a third of people out of work, so it's a huge issue.

"It's now very clear that the government's Work Programme is simply failing as job centre staff now lose all confidence in it and stop referring people to it," he said.

Anna Marie Detert, a director at KPMG Management Consulting, said the improvement was being driven by the private sector, in manufacturing and services, but it was too early to tell whether it was the first sign of real sustainable growth in the jobs market.

"We are seeing greater numbers securing permanent jobs across a variety of sectors, but progress is slow and employment figures are masked, to some degree, by the high numbers employed in part-time roles," she said.

The breakdown showed wide disparities across the UK, with unemployment falling in the North East and North West, but rising in Scotland and Northern Ireland.

The ONS also released pay data showing that average earnings increased by 1.8% in the year to August, 0.1% up on the previous month.