UK unemployment rate falls to 7.7pct

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Associated Press

Posted on January 23, 2013 at 6:02 AM

Updated Wednesday, Jan 23 at 7:03 AM

LONDON (AP) — Britain's unemployment rate has fallen to 7.7 percent, officials statistics showed, easing pressure on the Bank of England to inject more money into the economy.

The unemployment rate for the September-November period was down from 7.8 percent in the previous three months, the Office for National Statistics said Wednesday.

Chris Williamson, chief economist at financial data company Markit, noted that vacancies were at a four-year high which suggested that the "perplexing situation of rising employment in a stagnant economy may continue into the new year."

Meanwhile, minutes of the Bank of England's Monetary Policy Committee's January meeting showed there was again an 8-1 vote to hold the bond purchase, or quantitative easing, program at 375 billion pounds ($595 billion). David Miles again was the only advocate for the program, intended to lower the cost of borrowing and spur lending.

The minutes also suggested, however, that there had been a lively discussion on the issue. Modestly positive developments had strengthened the belief of some members that no further stimulus was needed, while others thought more could be done without causing much additional inflationary pressure.

"Be in no doubt that we are ready to provide more stimulus if it is needed," Bank Governor Mervyn King said in a speech on Tuesday.

However, he said prolonged reliance on stimulus had unwanted side effects, including encouraging excessive risk taking by depressing interest rates.

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