Unemployment falls but average earnings remain subdued

London - 17 March 2010

Figures released today by the Office of National Statistics showed the number of Britons claiming unemployment benefits fell by 32,300, bringing the rate of unemployment down to 7.8%. This is the biggest monthly fall since 1997.

Average earnings growth increased from 0.7% to 0.9% and long-term unemployment, which is based on those out of work for more than 1 year, rose by 11,000 to 134,000.

Mark Bolsom, Head of the UK Trading Desk at Travelex, the world’s largest non-bank FX Specialist, said, “The unexpected fall in the claimant count figure is good news. It will certainly offer the government some much needed relief after yesterday’s challenges from the European Commission.

“However, our Average Earnings growth is subdued and does not bode well for consumer demand – a huge driver in our economic recovery. It definitely takes some shine off the more positive claimant count figure. In the short-term however, investors are more likely to see this data as a positive step in the UK’s economic recovery.”

Sterling soared off the back of the news, rising 1.01% against the euro to 1.1152 and 1.01% against the dollar to $1.5370.

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