By Marcus Leach

David Kern, Chief Economist at the British Chambers of Commerce (BCC), has said that the latest unemployment figures from the Office for National Statistics are 'encouraging'.

The official rate of unemployment in the UK fell by a further 51,000 in the three months to April, taking the number to 2.61 million. Combined with a fall in UK inflation it is promising for the UK economy.

“This is encouraging news at a crucial time for the UK economy. Although the level of youth unemployment remains high, overall these figures show a flexible and robust job market," Kern said.

"This proves that the private sector is willing and able to create new jobs while public sector employment continues to shrink. The figures also highlight a contrast between growth in jobs and declines in GDP reported by the ONS, although we still expect some upward revision in the output figures.

“We should be encouraged by these figures, but uncertainty still lies ahead. Continued difficulties in the eurozone create challenges for our exporters at a time when domestic demand is under pressure. Further net increases in unemployment are still likely over the next year, but the peak will probably be lower than the 2.9m figure predicted in our latest forecast.

"Businesses are keen to grow and invest, but the government needs to do more to help them create jobs. More forceful deregulation, stronger incentives for employment, and a business bank to improve access to finance would enable more firms to hire with confidence and drive growth.”

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