Jobless rate falls to two-year low

UNEMPLOYMENT has fallen to a two-year low in a sign that Britain's jobs market is holding up well, despite the global economic downturn.

In a boost for Gordon Brown, unemployment fell 20,000 to 1.47m in the three months to May. That took the jobless rate down to 5% - the lowest since May 2001.

There was good news on the employment side of the equation too, with the number of jobs growing by 101,000 to a record 27.9m. Older and part-time employees were in large part responsible.

Economists said continued job creation was good news for the economy. 'Today's report supports our view that while a rise in unemployment over the coming months is likely, the rise is not set to be dramatic,' said George Buckley at Deutsche Bank.

On the alternative claimant count, which measures those drawing the dole, there was another small rise of 1,700 in June, taking the total to 952,000, or 3.1% of the workforce. The rise was much smaller than the City expected.