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UPDATE 1-UK claimant count up in Sept, outlook bleak

Published 10/13/2010, 05:14 AM
Updated 10/13/2010, 05:16 AM

(Adds comment, detail)

LONDON, Oct 13 (Reuters) - The number of Britons claiming jobless benefits rose for a second month in September and analysts said a fall in a wider measure of unemployment did not change a bleak outlook for the labour market.

The Office for National Statistics said the number of people claiming jobless benefit rose by 5,300 last month, slightly above forecasts for a rise of 5,000, and the biggest rise since January. August's increase was revised up to 3,800.

The number without work on the wider ILO measure, however, fell by 20,000 to 2.448 million in the three months to August. That took the jobless rate down to 7.7 percent from 7.8 percent -- the lowest since May 2009.

Employment rose by 178,000 to 29.158 million in the three months to August, but that was mainly due to a 143,000 rise in the number of part-time workers. The number of people employed by companies in full-time jobs fell by 17,000.

There was no market reaction to the figures, which did little to change the view that Britain's economy is in a fragile state ahead of a fiscal squeeze that is likely to see thousands laid off in the public sector.

"The latest data provide further evidence that the labour market recovery is faltering, even before the public sector job cuts really begin," said Vicky Redwood at Capital Economics.

Britain's economy bounced back from an 18-month recession, but growth is already showing signs of slowing, raising the possibility that the Bank of England will have to do more to support the recovery.

The government will next week announce how its plan to reduce a record budget deficit will affect individual departments. A report on Wednesday also highlighted the extent to which private sector firms could also be hit by the cuts.

Average weekly earnings rose by 1.7 percent in the three months to August compared with a year ago, slightly above expectations for a 1.6 percent increase. Earnings excluding bonuses rose 2.0 percent -- the biggest rise since June 2009.

(Editing by Patrick Graham)

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