Jobless rate hits 5.3%

The unemployment rate hit its highest level in three and half years in April while earnings growth remained subdued, official data shows today.

The Office for National Statistics said unemployment for the three months to April rose to 5.3% from 5.1%, its highest since September 2002. The number of unemployed was up 77,000 on the previous three months to 1.61 million.

Average earnings including bonuses increased by 4.4% in the three months to April, up from 4.2% in the prior three-month period. This is the highest in a year but less than economists had forecast. Excluding bonuses, earnings growth slowed to 3.8% from a revised 3.9% for the previous months.

Economists believe the increased level of unemployment in recent months has kept a lid on earnings growth, which should ease fears that the Bank of England's monetary policy committee is likely to raise the cost of borrowing to keep inflation under control.

The ONS said the number of people claiming benefits rose by 5,800 in May, leaving the jobless rate unchanged at 3%.

The number of "economically inactive" - not working or seeking work - continued to fall, with the total economic inactivity rate falling to 21.1% for the three months to April.