UK unemployment climbs to 2.47m

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http://news.bbc.co.uk/1/hi/business/8258405.stm

The number of people out of work in the UK has risen to its highest level in 14 years, official figures have shown.

Unemployment increased by 210,000 to 2.47m in the three months to July, taking the jobless rate to 7.9%, the Office for National Statistics said.

Claims for unemployment benefit in August grew by 24,400 from July to 1.61m, the highest since May 1997.

There have been signs the UK economy is beginning to pick up, but jobless data tends to lag behind other measures.

The number of 16 to 24-year-olds out of work rose from 928,000 to 947,000 - edging closer to the landmark of one million and adding to fears of a new "lost generation" of young people.

The jobless rate among this age group is at 19.7% - the highest since records began - meaning one in five is looking for work.

Average earnings, including bonuses, increased by 1.7% in the three months to July, down from the previous month.


The level of unemployment is now at its highest since May 1995.

Earlier this week, the governor of the Bank of England, Mervyn King, said there were signs that the UK economy was growing again.

But he added that the "strength and sustainability" of the recovery were still "highly uncertain", saying the state of the banking system, levels of debt, and the global economy were all drags on growth.

   
More workers, particularly young workers, are paying a devastating price for the bankers' recession and there is some way to go before unemployment stops rising
Paul Kenny
GMB Union


There had been concerns that the unemployment figure would rise above the psychologically important 2.5 million mark this month.

However, unemployment is still likely to reach three million in 2010, and could go higher, said economist Howard Archer of IHS Global Insight.

"Unemployment is a lagging indicator and the sharp overall economic contraction suffered between the second quarter of 2008 and the second quarter of 2009 will continue to weigh down on the labour market for an extended period," he said.


Government spending to stimulate the economy boosted employment in the public sector by 13,000 in the three months to June, the figures showed.

This contrasted with a 230,000 fall in private sector workers over the same period, the ONS said.

However there are fears that future cuts in spending aimed at tackling the huge budget deficit will lead to job losses in the public sector.

"More workers, particularly young workers, are paying a devastating price for the bankers' recession and there is some way to go before unemployment stops rising," said Paul Kenny, general secretary of the GMB union.