British unemployment rate steady at 7.9%

Britain's unemployment rate held at 7.9 per cent in the three months to August, official data showed yesterday, holding stable on a quarterly basis for the first time since March last year.

The news, published by the Office for National Statistics, comes amid rising hopes that data next week will show the British economy has officially exited a deep recession.

Market expectations had been for a rate of eight per cent. Since March last year, the jobless rate has increased every subsequent month as companies slashed jobs to save cash amid the downturn.

However, the ONS added yesterday that the number of people unemployed in Britain rose by just 88,000 people in the three months to August to reach 2.47 million people - which is the highest level since 1995.

"The brief summary is that unemployment is going up but more slowly than economists expected," said ECU Group analyst Kit Juckes in a note to clients.

"Further rises in unemployment are inevitable but the trend in job losses is slowing," he added.

In addition, despite fears of a youth unemployment crisis, the number of unemployed young people seeking a job eased to 946,000 in the three months to August.

That compared with 947,000 young people in the three months to July, which was the highest figure since records began in 1992.