Britain's unemployment rate, in the three months to January, was estimated at 5.0 percent, 1.1 percentage points higher than a year earlier and 0.1 percentage points higher than the previous quarter, the British Office for National Statistics (ONS) said Tuesday.
James Smith, a developed markets economist at financial services firm ING, said the unexpected drop by a 10th of a percentage point to 5 percent despite fresh lockdown policies, signaling "the jobs market remained fairly stable".
"After a volatile autumn, the UK jobs market stabilised through the winter, helped of course by the extended furlough scheme," said Smith.
Ruth Gregory, an economist at the London-based economic analysis firm Capital Economics, said the decrease of jobless rate highlighted "once again the extent to which the (British) government's job furlough scheme has protected jobs during the pandemic."
"We still expect the unemployment rate to rise further to a peak of 6.0 percent by early 2022, but that would be a much better result than most feared only a few months ago," Gregory added.
Noting that the unemployment rate was hard to estimate, Smith said "we think the unemployment rate could reach 6-6.5 percent later this year. However unlike previous jobs crises, the peak may not last for long and we'd expect a gradual improvement through 2022."
Suren Thiru, head of economics at the British Chambers of Commerce, echoed the prediction of rising jobless rate ahead.
"With many firms struggling with the damage done to their cash-flow by a year of COVID restrictions, unemployment is likely to remain on an upward trajectory until well beyond a full reopening of the economy," said Thiru.
The ONS data came as Britain on Monday recorded the lowest daily COVID-19 related death toll since late September last year.
On Feb. 22, British Prime Minister Boris Johnson announced his long-anticipated "roadmap" exiting the lockdown. The March 8 reopening of schools was first part of the four-step plan which is expected to see all legal restrictions in England being removed by mid-June.
Other parts of Britain, including Wales and Norther Ireland, have also unveiled plans to ease the restrictions.
Experts have warned Britain is "still not out of the woods" amid concerns over new variants and the risks of the public breaching restriction rules.
To bring life back to normal, countries such as Britain, China, Germany, Russia and the United States have been racing against time to roll out coronavirus vaccines.