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UK unemployment rises
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January 16, 2002: 6:01 a.m. ET
Jobless rate unchanged at 3.2% in December, claimant count rises
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LONDON (CNN) - UK unemployment rose for the third consecutive month as the world's fourth largest economy copes with a global slowdown.
The claimant count rose by 3,200 last month to 963,500. That was less than economists had predicted but November's jobless was revised higher to 6,000 from 4,800, the Office for National Statistics said.
Britain's jobless rate remained at 3.2 percent in December and wage earnings weakened, as inflation continued to ease. With last month's jobless rate lower than expected, and well below the European Union average, economists say this could rule out an increase in interest rates anytime soon.
Philip Shaw, an economist at Investec, told Reuters "such a modest increase [in unemployment] is unlikely to have any impact on consumer confidence or affect consumer spending."
"At the same, average earnings rose by less than expected which suggests very little inflationary pressure is coming from the labour market," he said. "This report suggests interest rates will be on hold for some time."
The Bank of England cut interest rates seven times last year in a bid to head off recession.
Earlier this month, BoE Governor Eddie George indicated the central bank may have to hike rates to cool consumer demand and keep inflation in check. His comments were in response to recent surveys showing a sharp rise in retail sales, soaring house prices and a jump in private borrowing.
But average earnings slid to just 4.2 percent from a year earlier in the three months to November, its lowest in a year, demonstrating a lack of wage inflation in Britain.
"Earnings growth has also stabilised below the Banks of England's supposed pain threshold of 4.5 percent." Jeremy Hawkins, an economist at the Bank of American, told Reuters.
"Today's (unemployment) data confirms what we already know... that the labour market has turned, but from very strong levels," Hawkins said.
Unemployment is expected to rise through much of the year as the U.S. economy, where some 16 percent of British goods are exported, is in recession. Japan is also in a recession, while growth in Europe's biggest economy Germany shrank.
Employment in manufacturing fell by 146,000, or 3.7 percent, to 3.776 million in the three months to November from a year earlier. That level is the lowest since records began in 1978. 
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