Number of jobless falls by 15,000

The number of jobless people in the UK fell by 15,000 in the three months to March, leaving the jobless rate steady at 4.7%, official figures showed today.

However, in a sign of a softening in the labour market, the Office for National Statistics figures showed the number of people claiming jobseekers' allowance benefits in April rose.

The 8,100 increase from the month before - taking the total to 839,400 - was the third rise in a row, the ONS said. April's claimant count rate for April was 2.7%, unchanged from the previous month but down 0.1% from a year earlier.

Today's data did not cover recent, high-profile job loss announcements affecting thousands of workers at MG Rover, IBM and Marconi.

Total employment rose by 87,000 on the previous three months, reaching 28.61 million. However, the number of economically inactive people increased by 14,000, to 7.86 million - one fifth of the working age population.

The figure, which includes people who are on early retirement, looking after a relative or have given up trying to find a job, has risen by 77,000 over the past year.

"Today's figures mean we start the government's historic third term with the strongest labour market for decades: employment at near record levels and unemployment the lowest for 30 years," Margaret Hodge, the new minister of state for work, said.

Despite the strength of the labour market, annual paypacket growth unexpectedly eased in the three months to March, mainly because of the timing of bonus payments in the financial sector.

The ONS said annual average earnings had risen by 4.6% in the three months to March compared with 4.7% in the prior period and less than the 4.8% expected. Excluding bonuses, annual pay growth slipped more sharply, falling to 4.1% from 4.3%, its weakest figure in a year.

"Of key interest to the Bank of England will be the fact that both headline and underlying average earnings growth fell back in March," Howard Archer, of the consultancy Global Insight, said.

"Indeed, the underlying rate in the three months to March was just 4.1%, comfortably below the 4.5% level considered consistent with the Bank of England's inflation target. This will reinforce belief that interest rates have peaked."

Bank of England minutes today showed its monetary policy committee had voted 8-1 to leave rates unchanged at 4.75% for the ninth month running. Although inflation currently stands at 1.9%, the Bank is more concerned about the slowdown in consumer spending and softer house prices.

Meanwhile, manufacturing jobs continue to be lost, with employment in the sector down to a record low of 3.23 million in the quarter to March, 82,000 lower than the same period a year ago.

In March, 4,000 working days were lost through industrial disputes - the lowest figure for that month since records began in 1931. Days lost through disputes totalled 533,000 in the year to March, 230,000 fewer than in the previous 12 months.

The UK continues to have one of the lowest unemployment rates in the world at 4.7%, compared with 9.8% in France and Germany, 10.2% in Spain and 5.2% in the US. Only Ireland, Austria and Luxembourg have lower jobless rates.