British Unemployment Dives, Inflation Rises: Government figures show that seasonally adjusted unemployment dived by 54,600 in December to 2.4 million, or 8.6% of the work force, from 8.8% in November. Unemployment has fallen for 11 months in a row and now stands at its lowest level in three years. But the good news on jobs was marred by a surprisingly large increase in inflation. Inflation year-over-year rose to 2.9% in December. It was 2.6% in November. This was higher than analysts had expected and fueled speculation about a possible interest rate rise to cool the hot economic recovery.