UK unemployment rises to 1.7m

UK unemployment rose by 21,000 to 1.7 million between December and February, the Office for National Statistics (ONS) says.

That is the first increase since the May-July period of last year.

The unemployment rate remained at 5.1%, which is still down on the same time last year, when it was 5.6%.

Earnings, including bonuses rose by 1.8% in the three

months to February, which is a slowdown from the 2.1% rate for the previous three-month period.

"It's too soon to be certain, but with unemployment up for the first time since mid-2015 - and employment seeing its slowest rise since that period - it's possible that recent improvements in the labour market may be easing off," ONS statistician Nick Palmer said.

There were 31.41 million people in work in the three months , a rise of 20,000 on the September to November period.

Delayed hiring?

Some economists believe uncertainty linked to the 23 June referendum on EU membership could be deterring companies from taking on new staff.

"Last week the Bank of England said that concerns about the EU referendum had begun to affect the real economy," said Ben Brettell, senior economist at Hargreaves Lansdown.

"The increase in unemployment announced today adds some weight to that hypothesis. It's possible businesses are delaying decisions about hiring and investment until after June's vote, which could lead to a slowdown in the first two quarters of this year.

"Nevertheless, the bigger picture is that the UK labour market remains in reasonable health," he added.

The increase in unemployment was too low to change the rate when expressed to one decimal place, which stayed at a decade low of 5.1%. 

Public sector falling

The figures also show that there were 5.35 million people employed in the public sector for December 2015. This was scarcely change compared with September 2015 but it was down 50,000 from a year earlier.

The ONS said the number of people employed in the public sector has been generally falling since March 2010.

In the private sector there were 26.07 million people employed for December 2015 - that is 113,000 more than for September 2015 and 529,000 more than for a year earlier.

In the October to December 2015 period the number of UK nationals working in the UK increased by 278,000 to 28.2 million compared with the same time in 2014. At the same time the number of non-UK nationals working in the UK increased by 254,000 to 3.22 million.