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UK unemployment falls to 7.7%

UK unemployment figures show 1.49 million people claiming Jobseeker's Allowance, with unemployment f

In the three months to April this year, UK unemployment has fallen by a total of 88,000. It stood at 7.9% in the previous quarter and has fallen to 7.7%.

This drop in unemployment is the biggest drop since the summer of 2000, however Jobseeker's Allowance saw a surge of people claiming in May when this figure rose from 19,600 to 1.49 million, this rise being the biggest since July 2009.

Analysts are warning that the rise in the number of people claiming could be because of the changes in benefit rules while the claimant count tells a much harder story about the state of the jobs market at present.

This news follows from figures published on Tuesday about the ongoing inflation rate, which was 4.5% in May, and is expected to continue to rise, meaning the real value of average wages is steadily becoming less and less.

The pound is also suffering in the currency markets, as the pound dropped half a cent against the dollar, and the FTSE 100 index also dropped slightly.

Analysts described the subdued rate of wage growth as reducing the chance that the Bank of England will raise interest rates this year, while Amit Kara at UBS said, "The market is reacting to a claimant count number and the wages data."