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Britain's jobs market weakened in February as the number of people claiming unemployment benefits rose by 14,600, official figures showed today.
The Office for National Statistics said the claimant count level for last month was 919,700 - up 102,000 on a year earlier. The monthly increase was the largest since December 1992, when Britain was coming out of recession, but at 2.9%, the unemployment rate is still close to its lowest level since 1975.
The claimant count has increased by an average of 5,900 a month over the last three months, indicating slack in the economy.
"The combination of rising unemployment, falling employment and muted earnings growth is hardly supportive for consumer spending or, for that matter, extended sharp house price increases," said Howard Archer of Global Insight.
Average earnings growth was much weaker than expected in January as many financial services firms did not pay out bonuses as they did last year. These may still feed through into the figures later in the year.
In the three months to January, average earnings including bonuses were 3.5% higher than a year ago, unchanged on the previous month's figure. Excluding bonuses, the rate was 3.8%, a rise of 0.1%.
"Average earnings growth was far softer than anticipated. It remained at 3.5% ... and is well below the 4.5% rate that the Bank of England has in the past considered compatible with its inflation forecast," James Knightley of ING Financial Markets told Reuters.
Subdued earnings growth should reassure the Bank of England as it has expressed concern that higher energy prices in the form of petrol and utility bills will lead to higher pay claims and higher inflation.
In the three months to January, the unemployment rate was 5%, up 0.1% from the three months to October 2005 and up 0.3% from a year earlier.
"The fundamentals remain strong. Employment is up on the year, vacancies up again this quarter and redundancies at historically low levels," Margaret Hodge, the minister of state for employment and welfare reform, said.
"However claimant unemployment is up. To some extent this is offset by falls in numbers claiming other benefits."
The number of people in work in November to January stood at 28.8 million, one of the highest figures on record. The employment rate is 74.5%, down 0.4% on this time last year, but again still one of the highest figures on record.
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