Kenneth Clarke, the Chancellor of the Exchequer, said: ``The figures keep coming in defiantly good.'' He said he would take whatever action was necessary to keep inflation down over the next few years.
Unemployment fell by 27,400 last month, reaching its lowest level since June 1991 at 2.36 million. The rate of joblessness was 8.4 per cent.
The drop last month was smaller than the recent average of 34,500. Moreover, the number of vacancies at JobCentres has fallen for the third consecutive month.
Thanks to far smaller City bonuses this year than last, the underlying increase in average earnings declined to 3.5 per cent in January. Earnings growth had been flat at 3.75 per cent for two years. Department of Employment statisticians warned that the bonus effect could be temporary.
However, labour costs per unit of output rose 1.8 per cent in the year to January - the highest growth rate since March 1994. The increase reflected the fact that employment is picking up with its usual lag behind increases in output.
The number of people in work rose by 173,000 in 1994, with most of the gain coming from an increase in jobs in financial and business services and from self-employment. Falls in the first half of the year were more than offset by strong gains in the second half. At the end of the year total employment had nearly returned to its early-1992 level.
Earlier figures for the number in employment have been revised up substantially, mainly due to the use of a new source of data on jobs in the construction industry. The new statistics show that there has been an upward trend in the numbers in work since early 1993.
Separate official figures for retail sales last month showed, contrary to the CBI's survey published on Tuesday, that there was a 1.2 per cent jump in the volume of sales in February, reversing an equivalent fall in January. The categories that dipped in January - clothing and footwear, mixed retailing and other non-foods - were the same ones that recovered last month.
The reason for the dip and rebound in the official figures is almost certainly the difficulty of adjusting for the big seasonal swings in sales over Christmas.
Last year 13 per cent of retail sales by value fell in December, higher than the previous year when more sales were held in January.Reuse content