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Number of Britons claiming jobless benefits falls

The number of Britons claiming unemployment benefits fell in November for the first time in almost two years, according to official data out Wednesday, giving a boost to hopes that the British economy is emerging from recession.
/ Source: The Associated Press

The number of Britons claiming unemployment benefits fell in November for the first time in almost two years, according to official data out Wednesday, giving a boost to hopes that the British economy is emerging from recession.

The 6,300 drop in so-called claimant count unemployment was the first decline since 2008, leading economists to suggest that the peak in unemployment is likely to be lower than in previous recessions.

IHS Global Insight economist Howard Archer said the improvement was a "very welcome surprise."

"It seemed inconceivable only a few months ago that we would be seeing any falls in claimant count unemployment this year or even in the early months of 2010," Archer said.

The data from the Office for National Statistics also showed that the number of people seeking work in the three months to the end of October rose by just 21,000 to 2.49 million — the smallest gain in 17 months.

That took the unemployment rate to a 13-year high of 7.9 percent, but confirmed expectations that the rate was slowing.

In more good news, the number of people in work rose by 53,000 to 28.9 million in the quarter to the end of October, the biggest increase for 17 months.

"It appears that the labour market deterioration is petering out and the peak in unemployment is likely to be lower than in previous recessions," said Hetal Mehta, Senior Economic Advisor to the Ernst & Young ITEM Club.

Britain remains the only major economy still officially in recession, but the government and central bank have both forecast a return to growth by the end of the year.

The jobless figures are a boost to Prime Minister Gordon Brown's Labour Party ahead of next year's general election, where the state of the economy is likely to be a major factor.

But the opposition Conservative Party, currently leading in the polls, highlighted the data revealing that youth unemployment reached a record high. The number of 16 to 24-year-olds out of work reached 952,000 in the three months to October, the highest figure since records began in 1992.

"This is yet more evidence of the devastating effect the recession is having on young people," said Theresa May, the Conservatives' spokeswoman for work and pensions.