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Apr 16, 6:22 AM EDT

UK unemployment keeps falling amid recovery

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LONDON (AP) -- Britain's unemployment rate has fallen below 7 percent for the first time in five years, with earnings growth narrowly outstripping inflation for the first time since 2010.

The Office for National Statistics said Wednesday that 2.24 million people were unemployed in the three months to February, a rate of 6.9 percent. That compares with 7.2 percent in the previous quarter.

Average earnings grew by 1.7 percent in the year to February, exceeding the rate of inflation, which was 1.6 percent at last count, in March. Stripping out bonuses, however, earnings growth was a more modest 1.4 percent.

Chief Secretary to the Treasury Danny Alexander said the figures were evidence Britain's economic recovery was becoming "embedded."

The drop in unemployment may increase pressure on the Bank of England to consider raising its benchmark interest rate from a record-low 0.5 percent.

Until earlier this year the bank had said its key interest rate would remain on hold until joblessness fell to 7 percent. After the unemployment rate fell faster than expected, bank governor Mark Carney broadened the forward guidance policy to include other economic indicators such as wage growth and productivity.

David Kern, chief economist at the British Chambers of Commerce, said that the economic figures were encouraging, but youth unemployment remained "much too high" at 19.1 percent, and there were more than 800,000 people who have been unemployed for more than a year.

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