British unemployment rose for the seventh month running in August but economists said the increases were getting smaller and suggested the labour market was stabilising, official figures showed today.
The Office for National Statistics said the number of jobless claiming benefits rose 1,600 last month, less than the 4,800 predicted by analysts. July's increase was revised down by half to 1,400 and the jobless rate stayed at 2.8 per cent.
Annual earnings growth ticked up to 4.2 percent in the three months to July but this was driven by higher bonuses. Pay growth excluding bonuses slowed, suggesting underlying wage pressures remain muted despite the surge in energy costs.
The Bank of England's MPC held interest rates at 4.5 per cent last week after cutting them for the first time in two years in August to boost a slowing economy.
Many analysts still expect a further cut in rates in the months ahead, pointing to huge layoffs announced by companies such as US computer giant Hewlett Packard, but a run of recent strong data has made them less certain of a move soon.
Excluding bonuses, annual earnings growth in the three months to July dipped to 3.9 percent from 4.0 percent. "There are few signs that the tight labour market or higher oil prices are feeding into higher wages," said John Butler, UK economist at HSBC Markets.