LONDON, Jan 18: British unemployment rose for the 11th month running in December, official data showed on Wednesday, adding to the case for an interest rate cut, analysts said.

Very modest earnings growth, coupled with a further increase in unemployment and an easing back in employment, significantly boost the case for a near-term interest rate cut, said Global Insight economist Howard Archer.

The number of people claiming jobless benefits increased by a higher-than-expected 7,200 from November to 909,100 people, the National Statistics office said.

The unemployment rate stood at 2.9 per cent in December, unchanged from the previous month. The rate of 2.7 per cent in May was the lowest level for 30 years.

The number of unemployed in Britain, as measured by the internationally recognised International Labour Organisation, rose by 111,000 to 1.528 million in the three months to November from the previous three months. That marked the biggest increase since February 1993.

The unemployment rate, as measured by the ILO, increased to 5.0 per cent in the three months to November — the highest level since October 2003 — compared with 4.9 per cent previously.

Wage inflation remained subdued over the period. Average earnings, excluding bonuses, rose by 3.8 per cent in the three months to November 2005, compared with the same period the previous year.

“Following on from benign December consumer price inflation data, the odds of a February interest rate cut is looking more and more a distinct possibility,” Archer added.

Twelve-month British inflation fell to the Bank of England’s 2.0-per cent target in December, official figures showed Tuesday.

Last week, the Bank of England held its key repo rate — at which it lends to commercial banks — steady at 4.50 per cent for the fifth month in a row amid signs of a pick-up in the economy. They were last cut by a quarter-point in August.—AFP