UK unemployment rises to 2.5 million

Unemployment in the UK rose to 2.5 million in the three months to the end of November 2010, according to figures released today by the Office for National Statistics (ONS).

The figures show that the employment rate in that quarter fell by 0.3 percentage points, to 70.4%. This equates to 69,000 fewer people in employment. According to the ONS, the last time there were larger quarterly falls in the employment level and rate was in the three months to August 2009.

The unemployment rate for the three months to November 2010 was 7.9%, up 0.2 percentage points on the quarter. The total number of unemployed people increased by 49,000 over the quarter to reach 2.5 million.

Dave Prentis, UNISON general secretary, highlighted the impact of public sector job cuts and cast doubt on government predictions that job creation in the private sector would help to offset public sector job losses: “Drastic cuts have hit the public sector hard, which is haemorrhaging jobs every day. Today Hampshire Council announced plans to cut 1200 jobs, and Essex is set to lose 200.

“These cuts dampen demand and hit private firms dependent on public sector contracts. The private sector is no knight on a white charger waiting to come to our rescue.”

Prospects look particularly bleak for younger jobseekers, with one in five 16- to 24-year-olds now out of work. This follows a rise of 32,000 to 951,000 jobless in this age group, the highest since records began in 1992.

Recruitment and Employment Confederation (REC) chief executive Kevin Green expressed concern about these figures, saying: “The overall increase in unemployment is in line with the REC’s own forecasts.

“What is particularly concerning about the figures is the growth of 32,000 in the number of 16- to 24-year-olds not in work, which has now hit an all-time high of 951,000. The UK is in serious danger of creating a lost generation of young people who are not in work, training or education.

“With the Government declaring itself pro-business, pro-growth and pro-jobs, it should make this a top priority for the sake of the long term health, wealth and success of the UK economy.”

There were also 157,000 redundancies in the three months to November 2010, a quarter-on-quarter increase of 14,000.

According to the ONS figures, the earnings annual growth rate for total pay including bonuses was 2.1%, while the growth rate for regular pay excluding bonuses was 2.3%.

The ONS figures come on the same day that the Institute for Public Policy Research (IPPR) warned of further rises in unemployment, due to what it called an “employment double-dip”.

Tony Dolphin, IPPR chief economist, said: “History suggests the UK economy needs to grow at an annual rate of more than 2% if unemployment is to fall. There is a real risk that growth will not be fast enough during 2011, and that unemployment will reach new highs for this economic downturn.

“While the prospect of a double dip into negative growth has receded, a double dip in employment is a real prospect.”

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