Unemployment sees biggest increase since 2013, says ONS

Unemployment unexpectedly rose by 46,000 to 1.47 million in the three months to December, official figures show.

It was the largest rise in the jobless total since early 2013 and the first time it has jumped since the summer of 2016.

The figures from the Office for National Statistics (ONS) sent the pound half a cent lower against the US dollar to just over $1.39.

They showed that the unemployment rate also rose, from 4.3% to 4.4%.

Pay growth turned higher - with average weekly earnings, excluding bonuses, up by 2.5%, an improvement on the previous figure of 2.3%.

But wage increases continue to lag behind inflation, meaning that in real terms pay fell by 0.3%.

The Bank of England is anticipating a pick-up in wage growth soon - a key reason why it recently signalled that interest rates were likely to rise faster and to a greater extent than previously thought.

Unemployment has been generally falling since a post-recession peak in 2011, apart from a handful of increase, most recently in 2016.

There is no evidence yet as to whether the latest fall is another apparent blip or the beginning of an upturn in joblessness - at a time when wider economic growth has been slowing.

Despite the latest increase, the jobless total is 123,000 lower than a year earlier.

Meanwhile the number of people in work continued to rise over the last three months of 2017 to 32.15 million, though the increase - of 88,000 - was much smaller than expected.

The fact that there was a rise in unemployment at the same time as rising employment was explained by the fact that the number of economically inactive people - those not seeking or available to work - fell in the period.

Meanwhile, growth in the number of EU nationals working in Britain slowed and the number of eastern European workers fell. Rising employment in 2017 was driven by UK nationals, the ONS said.

Employment minister Alok Sharma called the employment rate of 75.2%, which is close to record highs, an "incredible achievement". However, it was a fall compared to the previous month's figure of 75.3%.

TUC general secretary Frances O'Grady said the continued squeeze on real terms pay was "pushing families to the brink".

Chris Williamson, chief business economist at IHS Markit (Stuttgart: A1139A - news) , said the figures contained "mixed message" for Bank of England rate-setters.

He said: "While an upturn in pay growth opens the door further for interest rates to rise again, possibly as soon as May, signs of the labour market losing steam add to worries that the economy is struggling under heightened uncertainty."