UK unemployment claims drop unexpectedly last month while average earnings rise 2.8%

The unemployment rate in Britain held steady last month, while the number of unemployment benefit claims declined, surpassing analysts' expectations. Official data published by the Office for National Statistics on Wednesday showed claims for unemployment aid dropped 10,000 in December, while economists anticipated a gain of 2,500. Though the number of female claimants was 600 higher than men. The November rate was revised down to 1,300 from the originally reported 2,400. Meanwhile, the unemployment rate remained unchanged at its 11-year low of 4.8%, matching market forecasts. However, the number of employed people dropped 52,000 to 1.6 million in the three month period to November, the lowest level since 2006. The ONS also reported the Average Earnings Index increased 2.8% year-over-year. The reading slightly topped economists' expectations for an increase of 2.6%. Excluding bonuses, earnings advanced 2.7%, the largest gain since mid-2015. 

The earnings figure is closely followed by the Bank of England since the Brexit vote. According to the latest inflation forecasts, the current average earnings growth is unlikely to significantly boost inflation, though the weakening labour market is likely to cut consumer spending, harming the economy's growth outlook.