Britain's unemployment rate hits 4.9 pct in March-May

LONDON -- Britain's unemployment rate for people aged 16 and over was estimated at 4.9 percent in the three months to May, data released by the Office for National Statistics (ONS) showed on Tuesday.

The rate was up 0.2 percentage points year-on-year but down 0.1 percentage points compared to the latest quarter, according to the ONS.

During the period, annual growth in employees' average earnings in real terms, adjusted for CPI inflation, was 0.4 percent for regular pay and 1.3 percent for total pay.

In the second quarter of this year, job vacancies were estimated to decrease by 0.9 percent to 712,000, compared with the first quarter.

"Today's labor market data is a stark example of the challenges awaiting (British Prime Minister) Andy Burnham as he settles into Number 10," said Patrick Milnes, head of Policy for People and Work at the British Chambers of Commerce (BCC).

BCC's latest forecast suggests the unemployment rate could reach 5.2 percent by Christmas as firms struggle with a host of cost pressures, he said. "With vacancies falling, economic inactivity in flux, and private sector wage growth stalling, businesses are waiting to see how global and domestic policies shift," he added.

Alex Hall-Chen, principal policy advisor for employment at the Institute of Directors, said: "This ongoing decline in employer demand for labor is not inevitable; it is the result of a series of employment policy decisions over the past two years which have made hiring staff riskier and more expensive for employers."

Noting that supporting job growth by removing barriers to hiring must be a priority for the new government, she said Burnham's commitment to driving economic growth across the country is welcome, but will mean little without action to bring down the cost of employment and boost job creation around Britain.