Economy

Shock as unemployment rises at fastest pace in five years

Shock as unemployment rises at fastest pace in five years

There was also a better-than-expected rise in wages, although it still trails behind inflation, which stood at 3 percent in December, 2017.

UK ILO unemployment rate rose by 0.1 percentage points to 4.4 percent in three months to December, data from the Office for National Statistics showed Wednesday.

"This is the sharpest increase in the unemployment level the ONS has seen in nearly five years", said Matt Hughes, a senior statistician from the ONS.

Although the UK's quarterly rise was the biggest since early 2013, national unemployment is 123,000 lower than a year ago, according to the Office for National Statistics (ONS).

ONS data shows average wages increased more than expected over the same period, climbing by 2.5%.

Despite the headline rise in unemployment, the figures will likely give support to the Bank of England's desire to raise interest rates in May, given the signs of inflationary pressure amid a still strong labour market.

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Officials from the Bank of England may take encouragement from pay increasing 2.8 percent on the year in December alone. The unemployment rate has fallen by such a degree in recent years that some commentators have described the situation as Britain's "jobs miracle". Including bonuses, the rate was unchanged at 2.5 percent.

There were 1.47 million unemployed Brits in the final quarter of 2017, an increase of 46,000 from July to September past year.

Meanwhile, growth in the number of EU nationals working in Britain slowed and the number of eastern European workers fell.

Separate figures showed that Britain's government recorded a January budget surplus of 10 billion pounds (about $14 billion), slightly bigger than forecast, helped by a surge of income tax receipts that typically comes at the start of the calendar year.

TUC general secretary Frances O'Grady said: "Nobody should have to rely on a zero-hours contract for their main job, but over 900,000 workers remain stuck in that situation".

He said: "While an upturn in pay growth opens the door further for interest rates to rise again, possibly as soon as May, signs of the labour market losing steam add to worries that the economy is struggling under heightened uncertainty".