UK unemployment falls to lowest since early 2009, hiring surges

LONDON, June 11 (Reuters) - Britain's unemployment rate fell by more than expected in the three months to April to its lowest level since January 2009 as a record number of people found work.

Pay growth fell sharply in April after the figure last year was boosted by delayed bonus payments, the Office for National Statistics said on Wednesday.

The recovery in the labour market comes as some Bank of England officials say the case for raising interest rates may be getting stronger.

The jobless rate fell to 6.6 percent between February and April from 6.8 percent in the first quarter, below the 6.7 percent rate expected in a Reuters poll.

The BoE is looking at a broad measure of spare capacity with a focus on the labour market when considering when to start raising interest rates from a record low.

A plunge in unemployment forced the Bank earlier this year to adjust its original version of forward guidance under which it ruled out considering a rate hike until unemployment fell to 7 percent jobless rate.

The number of people in employment surged by 345,000 to 30.535 million in the three months through April - the biggest increase since records began in 1971 - smashing the previous record set last month of 283,000.

The ONS said that the rise in employment was due mainly to people being employed by companies rather than self-employed as has been the case recently.

Total (NYSE: TOT - news) pay growth including bonuses was a yearly 0.7 percent in the three months through April, slowing from 1.9 percent in the three months to March. In the month of April alone it fell by 1.7 percent.

Economists had expected pay growth to slow because last year the figure was boosted by companies delaying payments of bonuses until April to help their staff benefit from a cut in the top rate of income tax.

Excluding bonuses, pay rose 0.9 percent in the three months through April, and 0.4 percent in April alone.

Both readings of pay growth in the three months through April were weaker than forecast in a Reuters poll.

The labour market's strength has raised questions about how long the Bank of England can refrain from raising interest rates, as it tries to avoid hurting a recovery which was slow to take hold compared with other major economies.

BoE (Shenzhen: 000725.SZ - news) policymaker Ian McCafferty said on Monday the BoE is getting closer to raising interest rates and data over the summer and autumn will be key in determining the exact timing.

(Reoprting by Ana Nicolaci da Costa (NasdaqGS: ATX - news) and William Schomberg)