UK suffers small rise in jobless

LONDON, July 17 (Reuters) -- Unemployment in Britain unexpectedly rose last month while average earnings growth has picked up to its strongest for six months, official data showed on Wednesday.

The Office for National Statistics said the claimant count measure of joblessness, which records those drawing unemployment benefit, rose by 1,300 last month to a level of 952,400, although that is only just above recent 27-year lows.

Economists had expected the number to fall again but the ONS also revised May's fall, originally reported at 7,000, to just 500. But those numbers are relatively small and will do little to unsettle financial markets.

The ONS also said employment, boosted by a rise in the working population and good demand from employers, rose to 28.5 million in the three months to May, the highest since records began in 1979.

Average earnings growth picked up to 3.8 percent in the same period, the highest since November last year. ONS officials, cautioned, however, that the rise from 3.3 percent in the three months to April was largely due to a very low reading for February dropping out of the comparison.

The new number, which was slightly lower than the average City forecast, will do little to stir inflationary worries at the Bank of England, however, since underlying consumer price inflation hit a 27-year low of 1.5 percent last month.

The BoE is charged by the government with hitting a target for underlying inflation of 2.5 percent. It has left interest rates on hold at 4.0 percent since last November and is now thought unlikely to raise them any time soon.

Rate setters at the BoE have also indicated that they are not worried by earnings growth if it remains below 4.5 percent.