LONDON (Bloomberg) -- UK unemployment fell in the quarter through April and jobless benefits dropped last month by more than economists forecast as the economy shook off the recession.

Unemployment measured by International Labour Organization methods slipped to 2.472 million people from 2.51 million in the first quarter, the Office for National Statistics said on Wednesday in London. The number of people claiming jobless benefits dropped 30,900, exceeding the median forecast of 25 economists for a decline of 20,000.
Chancellor of the Exchequer George Osborne is set to outline the deepest spending cuts in a generation in an emergency budget next week, which may hamper the recovery after two quarters of growth. Public-sector job losses may push unemployment close to 3 million by 2012, according to the Chartered Institute of Personnel and Development.
“It may be the calm before the storm of public sector job losses,” said Alan Clarke, an economist at BNP Paribas SA in London. “We’d rather see the claimant count falling than rising, though this may be as good as it gets.”
The pound pared its decline against the dollar after the report and was little changed at $1.4816 as of 11:28 a.m. on Wednesday in London.
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The number of people claiming benefits fell to 1.48 million in May, the lowest in 14 months, the statistics office said. The ILO unemployment rate of 7.9 percent in the quarter through April is lower than the median forecast of 8 percent in a Bloomberg News survey of economists.
The UK’s unemployment rate compares with 10.1 percent in the euro area, 9.7 percent in the U.S. and 5.1 percent in Japan.
The number of Britons classified as inactive rose to 8.19 million, the highest since records began in 1971. The statistics office defines inactive people as those not looking for or unable to work.
Public-sector employment fell by 7,000 to 6.09 million in the first quarter as local government and public corporations such as state-owned banks shed jobs, the statistics office said in a separate report. It was the first decline since the first quarter of 2008, just before Britain entered its worst recession since World War II. Employment in the private sector increased by 12,000.
The last Labour government added 900,000 workers to the state payroll during its 13 years in power, more than a third of them in the past two years to help counter the recession. The government now accounts for one in five jobs in Britain.