For the three months to November 2009, unemployment fell by 7,000 to 2.46m, the ONS said this morning. Meanwhile vacancy rates to December were up 16,000 to 448,000 on the previous quarter.
However, any hope of a strong recovery could be dashed by rising inflation as the Consumer Price Index (CPI) annual inflation rate jumped to 2.9% in December from 1.9% the previous month.
The rise, while the biggest monthly rise on record, was partly attributed to the usual seasonal rise between November and December 2009, but also to exceptional factors in December 2008, such as the cut in VAT and the sharp fall in the oil price.
The ONS said: "The exceptional events that took place in December 2008 that help explain the change in the CPI annual rate in December 2009 also apply to the change in the Retail Price Index (RPI) annual rate.
"In addition to these exceptional events, there was also significant upward pressure to the change in the RPI annual rate from housing. Within housing, the main upward effect came from mortgage interest payments, which rose this year, but fell significantly a year ago when most lenders passed on the one-and-a-half point decrease in the Bank rate."
The rise in inflation has stoked fears that the increases in interest rates, anticipated towards the end of the second quarter of the year, may come sooner if the inflationary trend continues.
However, Nicholas Mockett, of Moorgate Capital, does not believe that the Bank of England will be in any hurry to raise interest rates.
He said: "I think the CPI figures are unlikely to lead to a rise in the interest rate in the short term. Looking back on prices from 12 months ago, there were some unusual factors at play such as the fall in oil prices, which helped keep prices down, so we are comparing against a low base."
He added that there was a danger to the print industry that raw material costs could continue to rise as the rest of the world moves further out of recession.
"This is cost push inflation, rather than demand pull, and it is the latter which is often mitigated by higher interest rates," he said.
Britain remains the only major economy still officially in recession following the shock 0.2% decline in GDP in the third quarter of the year. However, figures out next week are expected to confirm that the economy grew in the fourth quarter of the year.
