U.K. unemployment declined unexpectedly at the end of 2016, while earnings growth accelerated reflecting that the labor market remained strong despite the 'Brexit' vote.

Data from the Office for National Statistics showed Wednesday that the number of people claiming unemployment related benefits decreased by 10,100 in December from November, confounding expectations for an increase of 5,000.

Nonetheless, the claimant count held steady at 2.3 percent in December, in line with expectations.

The ILO unemployment rate was unchanged at 4.8 percent during the three months ended November, the lowest since September 2005. In the same period of 2015, the jobless rate was 5.1 percent.

In the three months to November, unemployment decreased by 52,000 from August to 1.6 million.

At the same time, average earnings including bonus increased at a faster pace of 2.8 percent after rising 2.6 percent. Economists had forecast the annual growth to stay at 2.6 percent. Excluding bonus, earnings advanced 2.7 percent.

Consumer price inflation had risen to 1.6 percent in December and it is forecast to exceed the 2 percent target this year.

Suren Thiru, Head of Economics at the British Chambers of Commerce, said, "With employment levels still close to record levels and unemployment continuing to fall, the latest indicators confirm that the UK jobs market remains a major bright spot for the UK economy."

"While labor market conditions could soften over the next year as economic growth slows, the high degree of flexibility in the jobs market will help limit the extent of any uptick in unemployment," said Thiru.

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