LONDON (Reuters) — The number of people in work in Britain hit an all-time high late last year, highlighting the continued resilience of the labour market in the face of a stagnant economy.
The number of people in work rose to 29.730 million in the three months to December, the highest since records began in 1971, the Office for National Statistics said.
Unemployment benefit claims also fell much more than expected in January.
But concerns about economic growth remain, with the Bank of England's Monetary Policy Committee more divided than expected over whether to provide more stimulus, according to minutes of its latest meeting.
The number of people claiming jobless benefit fell by 12,500 last month, a bigger reduction than analysts' forecasts of a drop of 5,000 in Reuters poll.
"The labour market continues to defy gravity, with employment posting a solid increase in December despite little evidence yet of any real momentum in the economy," said Rob Wood, economist at Berenberg Bank.
"With little momentum, we don't think this strong employment growth is likely to continue through this year."
The number of people without a job on the International Labour Organization measure, which is wider than Britain's claimant count indicator, dropped by 14,000 in the three months to December to 2.501 million.
The ILO jobless rate stood at 7.8 per cent, compared with forecasts for a steady reading of 7.7 per cent.
British employers plan a modest increase in staffing levels early this year, as optimism in the private sector outweighs deep job cuts eyed in the public sector, according to a survey for the Chartered Institute of Personnel and Development.
In addition, the central bank's regional contacts reported that employers in Britain's large business services sector planned to raise their workforce slightly in the coming year, the BoE said in a report.
Despite the steady improvement in employment, many British workers are seeing their standards of living eroded by weak growth in their incomes while inflation remains high.
The ONS said average weekly earnings growth including bonuses slowed modestly to 1.4 per cent in the three months through December, in line with forecasts. Excluding bonuses, pay grew by 1.3 per cent, slightly undershooting expectations. That was the weakest rise since three months through June 2010.
Wage growth remains well below inflation, which held at 2.7 per cent in January for the fourth consecutive month.