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UK Job Market Perks Up in Latest Sign of Recovery

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The number of Britons claiming unemployment benefit fell more than expected in May to its lowest in two years in the latest sign that the recovery is moving onto a firmer footing.

The Office for National Statistics said the number of people claiming benefit dropped by 8,600 last month, its seventh consecutive drop. Analysts in a Reuters poll had forecast a drop of 5,000.

The number of people without a job, based on the wider ILO measure, fell by 5,000 in the three months through April to 2.51 million. The jobless rate held steady at 7.8 percent, as expected.

Britain's labour market has proved resilient despite the downturn of the past few years, helped by the willingness of workers to accept below inflation wage growth.

(Read More: UK Jobseekers Asked How to Fit Giraffes in Fridges)

Average weekly earnings grew by 1.3 percent in the three months through April, its fastest pace so far this year but still around half the rate of consumer price inflation. In April alone earnings rose 3.3 percent, helped by companies paying bonuses a month later than last year.

Excluding bonuses, pay growth was 0.9 percent in the three months to April and 1.3 percent in the month of April alone.

Wednesday's labour market data came a day after another ONS report showed Britain's industrial output rose for a third straight month in April. A series of upbeat business surveys last week also suggested the recovery was firming.

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