UK unemployment soaring
Unemployment levels are rising fast in the UK, with a 164,000 increase this month to 1.79 million.
The rise marks the eighth monthly increase and is biggest rise in 17 years, taking the official unemployment rate from 5.5 per cent to 5.7 per cent.
There has also been a rise in the number of people seeking job seekers allowance, increasing to 31,800, data from the Office for National Statistics (ONS) show.
“These figures are a clear indication of the real world consequences of Gordon Brown’s ‘Age of Irresponsibility’,” said Chris Grayling, shadow work and pensions secretary.
“Again and again he claimed that he had ended boom and bust. That looks pretty hollow now.”
The number of people in full-time employment stood at 21.91 million in the three months to August 2008, down 152,000 from the three months to May 2008.
The level of part-time employment, however, grew. Some 7.51 million people were employed in part-time jobs in the three months to August 2008, up 30,000.
In total there were 608,000 job vacancies in the three months to September 2008, a fall of 40,000 from the previous three months and down 62,000 over the year.
Jenny Willott, Liberal Democrat work and pensions spokesperson, said: “These figures come as no surprise and are only likely to get worse over the coming months.
“The effects of the banking crisis have filtered down to the real economy and are affecting people across the county.”
In anticipation of the rise, the government has announced an extra £100 million to re-train those workers expected to lose their jobs as the country’s economy slows down.
Some analysts are predicting worse is still to come, with unemployment predicted to rise to two million by Christmas and even to three million.
Vicky Redwood, UK economist at Capital Economics, said: “UK unemployment is continuing its upward march.
“With the UK heading into recession, we expect this measure to rise by a total of 1.5 million to around 3 million or nine per cent by the end of 2010.”
Speaking at the EU summit this morning, prime minister Gordon Brown said he was determined to: “Help create jobs and help maintain jobs”.
He said: “We want to avoid unemployment and redundancies where possible. These are difficult times for world.”
Wage growth also fell, the statistics showed.
Average earnings – excluding bonuses – grew 3.6 per cent on an annual basis in the three months to August 2008, a fall of 0.1 percentage points from the three months to July.
The fall in wage growth will be welcomed by the Bank of England – which had raised fears that rampant inflation would have led employees to push for bigger salaries – and so creating further inflationary pressures.
The steadying of wage growth will make the monetary policy committee (MPC) more likely to cut interest rates in coming months.
Ms Redwood said: “The threat of a pick-up in pay growth has all but disappeared. Indeed, the 3.4 per cent headline rate of average earnings growth in August was its lowest since 2003.
“With inflationary pressures outside the labour market now easing markedly too, the way’s clear for aggressive interest rate cuts.”
The data also show although employment has fallen over the quarter, total hours worked remained unchanged at 944.2 million. The ONS says this reflects an increase in average hours worked per week, particularly by women in full-time employment.
