UK unemployment at lowest level since Spring 2001

UK unemployment fell in the three months to November 2003 to a two-and-a-half year low of 1.46m.

An extra 29,000 people found employment in the period leaving the unemployment rate at 4.9% of the workforce, according to data from the UK Office for National Statistics.

Analysts said the rise in employment was ahead of the City's expectations and underlined the strength of the labour market despite an economic slowdown.

The public sector led the way as the British government moved to address shortfalls in key public services, while the manufacturing industry continued to be hardest hit by job losses.

Average earnings declined unexpectedly to 3.5% in the three months to November last year compared to the corresponding time in 2002.

Analysts had been predicting an earnings rise of 3.7% but believe that the data will help calm any fears the Bank of England may have on the tightness of the labour market and wage inflation.