UK jobless figures 'at three-year high'

Union leaders in the UK tonight called for a cut in British interest rates and help for manufacturers after unemployment jumped by over 100,000 to reach the highest level in three years.

The British government admitted the increase was disappointing but said it underlined the importance of its efforts to boost welfare to work measures.

The TUC said the figures proved that manufacturing firms were having a particularly tough time after employment in the sector fell to a record low.

Figures showed that the number of people looking for work in the UK jumped by 111,000 in the three months to November to 1.53 million, the biggest total since the end of 2002.

The claimant count, which includes people receiving Jobseeker’s Allowance, rose by 7,200 in December to 909,100, the 11th consecutive monthly increase.

The figure is now 95,000 more than a year ago and is at a two-year high, according to the Office for National Statistics.

The unemployment rate is now 5%, an increase of 0.4% compared with last summer, while the 1.53 million total, which includes people out of work but not receiving benefit, is the highest since November 2002.

The number of people in work fell by 22,000 in the latest quarter, to 28.76 million.

There was also an increase in the number of people classed as economically inactive, including those looking after a relative, students or people who have given up looking for a job.

The figure rose by 25,000 on the quarter to 7.94 million, the highest total since records began in 1971.

Manufacturing jobs continued to be lost, down by 109,000 in the three months to November to a record low of 3.1 million.

Vacancies also fell at the end of last year, down by 12,700 from the autumn.

TUC chief economist Ian Brinkley said: “Manufacturing is having a particularly tough time right now. The Chancellor should use the forthcoming Budget to announce a strategy to protect and enhance UK manufacturing and the Bank of England should announce a cut in interest rates when it meets next month.”

The figures spelt difficulty for the Government’s welfare-to-work agenda and showed clear signs of weaker activity in the labour market, according to Dr John Philpott, chief economist at the Chartered Institute of Personnel and Development.

The jobless total, added to the number of those classed as economically inactive, meant there were now 3.5 million people who wanted to work, said Dr Philpott.

“This, together with a seemingly inexorable rise in the number of people claiming Jobseekers Allowance, is a worrying backdrop to the Government’s forthcoming Green Paper on welfare reform.

“At a time of economic uncertainty and weaker recruitment, persuading employers to hire more people from the Incapacity Benefit roll could prove an uphill task.”

Work Minister Margaret Hodge said: “Recent figures have been erratic and this quarter’s are disappointing. However, taking the year as a whole, the number of people in work is up by over 200,000.

“This all underlines the crucial importance of a step change in our welfare to work effort.

“We need to do more. Our Welfare Reform Green Paper will set out further steps we will take to tackle worklessness. We want to make sure that people get the support they need to enable them to take up one of the many new jobs that come up all the time.

“If we ensure that individuals have the opportunity to work, they, for their part, must exercise responsibility to move back into work.”

Vince Cable, Liberal Democrat Shadow Chancellor, said: “What could have been dismissed as a temporary blip is now becoming a very worrying permanent trend.

“The UK is heading back to the bad old days, and with worries growing over personal debt we could see people struggling to pay their mortgages and worrying about whether they will soon have a job.”

There was better news for the British government on the wages front, with average earnings growth falling by 0.2% to 3.4% in the year to November compared with the previous month.

Excluding bonus payments, the figure was 3.8%, down by 0.1% from October’s rate.

Increases in the public sector continued to outstrip those in private firms at 4.1% compared with 3.3%.