The number of Britons claiming unemployment benefit rose by much less than expected last month, although the total number of people unemployed on the broader

ILO measure hit its highest level in 17 years in the three months to October, official data showed on Wednesday.

ANALYSTS VIEWS:

JAMES KNIGHTLEY, ING FINANCIAL MARKETS:

UK labour data doesn't look too bad from the headline figures, but the underlying story is much weaker.

We see unemployment continuing to rise in the months ahead with the prospect of 3 million unemployed looking more and more likely given lead indicators are pointing to a growing threat of recession. Indeed, with the Eurozone sovereign debt situation showing little sign of being resolved the prospects for the labour market remain poor.

VICKY REDWOOD, CAPITAL ECONOMICS:

The UK's labour market downturn has eased a little, but unemployment still looks likely to rise much further as the economy relapses into renewed recession.

Public sector employment is still driving the employment falls, but private sector employment is doing little more than holding steady. The ILO measure of unemployment therefore rose, and while the claimant count posted a pretty modest rise of just 3,000 in November, this might just reflect unemployed people failing to sign on. Lastly, pay growth remains as subdued as ever - the headline rate of overall average earnings eased in October from 2.3 percent to 2 percent.

ALAN CLARKE, SCOTIA CAPITAL:

It was pretty robust across the board, 2-month unemployment has risen, whether it's a blip or not, remains to be seen. It is quite shocking job losses have slowed, but it was a encouraging report and shows that the UK may not be doing as badly as previously feared.

(On wage inflation): Not a great surprise, as we knew it was going to come down and is unlikely to change any time soon.

ROSS WALKER, RBS:

The claimant count series has been heavily distorted by changes to lone parent benefit entitlement, which led to big increases through the middle of this year, and which was always going to wash out. We'd certainly expect to see it pick up through next year.

I think the underlying trends in the ILO data are more important, and you can see a pick-up in that measure to 2.7 million, which is uncomfortable.

On the employment measure, I think for this calendar year as a whole we'll still have seen some employment growth, but I don't think we'll get that next year, so it's going to be another difficult year for household incomes.

On monetary policy, the Bank of England has got a pretty dovish set of forecasts and more QE is expected. There's nothing in here to make me think this is going to change any of that. If anything, you might conclude that over the last few months the underlying deterioration in the unemployment numbers has been more than forecast.

BRIAN HILLIARD, SOCIETE GENERALE

The number to focus on is the claimant count figures and it's a pleasant surprise not only to see a downward revision for the previous month but it up only 3,000 now. What that should do is to raise at least a few questions as to whether the weakness in Q4 is quite as bad as people had feared. It's not enough to make people revise their forecasts but it's a comforting feature when everything else is so gloomy.