Britain’s jobless rate edged up unexpectedly for the first time in nearly a year, just a week after its previously rapid fall had forced the Bank of England to stress that it was in no rush to raise interest rates.

Last week the BoE demoted the unemployment rate from its central role as a guide on how long to keep interest rates steady, after six months in which joblessness had tumbled far faster than the central bank had forecast.

But official data on Wednesday showed the rate had edged up to 7.2 per cent in the three months to December from November’s four-year low of 7.1 per cent, though it remains well below the third-quarter level of 7.6 per cent.

This was its first rise since February 2013 and one which bucked the expectations of economists and the BoE for it to hold within a whisker of the BoE’s 7 per cent threshold for its previous forward guidance.

The BoE retains its policy of not raising interest rates while unemployment remains above 7 per cent, something it originally expected to be the case for three years, but it said last week it would also look at a wider range of data before making a decision to raise rates.

The BoE said these measures included whether people with jobs wanted to work more hours. It added market expectations that rates would rise in the second quarter of next year were consistent with its aim of keeping inflation near its 2 per cent target.

Reuters