* Unemployment expected to keep rising into 2010
* Ulster Bank seeks 250 redundancies
(Adds more detail, comment)
DUBLIN, Aug 7 (Reuters) - The number of people claiming unemployment benefit in Ireland rose by 10,500 in July, the slowest pace in 10 months, signalling the worst may be over for the jobs market, data showed on Friday.
The cool-off in the pace of layoffs, along with recent improvements in surveys of the services and manufacturing sectors, are a small glimmer of hope for the former "Celtic Tiger" economy, which is expected to be the worst performer in the industrialised world this year.
"The Armageddon scenario that we had in the first quarter of the year has passed somewhat," said Dermot O'Leary, chief economist at Goodbody Stockbrokers.
"But it does not indicate that the increase in unemployment has stopped and it won't stop for some time."
Ulster Bank, the Irish subsidiary of Royal Bank of Scotland
Data from the Central Statistics Office showed that the number of people claiming unemployment benefit, which also includes some part-time workers, stood at 423,400 in July.
Economists had expected the live register tally to hit 424,000 last month according to the median forecast of six economists in a Reuters poll. [ID:nL29444317]
The estimated unemployment rate rose to 12.2 percent in July compared with 11.9 percent in June and a rate of around 4 percent in early 2007, when the property market, whose crash precipitated Ireland's worst ever recession, was still booming.
Analysts polled by Reuters expect unemployment to reach 13.9 percent at the end of this year and 15.5 percent at the end of next year.
The number of people losing their jobs in January was running at over three times the rate of July but despite the fall-off in layoffs there is no sign of a revival in consumer confidence, which is crucial to any economic recovery.
Wages are falling in the private sector and consumers are bracing themselves for another austerity budget in December which could see a cut in public sector pay and social welfare payments. (Reporting by Carmel Crimmins, editing by Ron Askew)