U.K. unemployment report

Britain’s unemployment rate dropped to a five-year low in February, underscoring the strength of the economic recovery and raising the prospect of a debate among Bank of England officials about whether to raise interest rates. The jobless rate measured by International Labour Organization methods dropped more than economists forecast to 6.9% in the three months through February from 7.2% in the quarter through January, the Office for National Statistics said in London today. The report also showed that wage growth accelerated in the period to 1.7%, matching the inflation rate in February. The pound strengthened. The estimate before the report was for the unemployment rate to drop to 7.1% in the three months through February. Today’s reading was the lowest since the three months ending February 2009.

The pound jumped 0.5% to $1.6809. Jobless claims, a narrower measure of unemployment, fell 30,400 in March from the previous month, a 17th consecutive decline that was larger than forecast. In February, claims dropped 37,000, more than the 34,600 initially estimated. The ONS also said that in the three months through February, employment surged 239,000 to a record 30.4 million people. The number of unemployed fell 77,000 to 2.24 million. The acceleration in wage growth from 1.4 percent in the quarter through January signals that a squeeze on consumers’ living standards may be easing.

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