Jobless decline to continue in face of global slowdown

Britain's unemployment is set to continue tumbling in the face of global economic slowdown, City of London analysts predicted on Wednesday, after the claimant jobless dropped below the watershed of one million for the first time since 1975.

But economists also gave warning that, despite an easing in earnings growth, Bank of England concern over pay pressure was likely to restrict its scope for further cuts in interest rates to counter any impact from the US downturn.

A fall of 10,600 in the number of people out of work and claiming benefit last month pushed headline unemployment down to just 996,200. The jobless total has not been below a million since December 1975.

The figures left ministers jubilant, although the Government's preferred, survey-based, measure of unemployment remained much higher, at 1.54 million in the latest three-month period.