UK unemployment total rises again
UK unemployment rose by 44,000 to almost 2.5 million in the three months to the end of December, the Office for National Statistics (ONS) said last month. “Youth unemployment rose to a fresh record high, with more than one in five 16 to 24-year-olds out of work after a rise of 66,000 to 965,000”.
The unemployment rate is now 7.9%, with youth unemployment running at 20.5%. The number of people claiming Jobseeker’s Allowance also increased, by 2,400 last month to 1.46 million.
The number of people in part-time work because they could not find a full-time job rose by 44,000 to 1.19 million, another high since records began in 1992.“The latest UK labour market figures provide further evidence that the jobs recovery has gone into reverse,” said Tory economist Vicky Redwood. Long-term unemployment also deteriorated, with 17,000 more people out of work for more than a year, to a total of 833,000.
Other data from the ONS showed that average earnings rose by 1.8% in the year to December last year, slightly down on the 2.1% growth in the year to November. But this is significantly lower than the rate of inflation now around 5%. And when the hike in VAT is considered the conclusion can only be: ‘A Resesh-on’
The ONS says there were 40,000 more job vacancies in the three months to January than in the previous three months. But said that most of these new vacancies were low paid temporary jobs, working on the 2011 Census. Excluding these, there were 8,000 more vacancies.
Labour work and pensions secretary Liam Byrne said this was a sign that the government could not rely on the private sector to create jobs.” There are still five people chasing every single job and in about a hundred constituencies, 10 people are chasing every job,” he told BBC News.
Most Tory analysts still expect unemployment to rise in the coming months, largely because of public sector spending cuts implemented by the government. “Unemployment is likely to increase throughout 2011 in the face of low growth and increasing job losses in the public sector,” said economist, Howard Archer.
Tory economists suggest the economy would have to grow at an annual rate of about 2% for unemployment to fall. In the final three months of last year, the economy shrank by 0.5%, few analysts expect GDP to top 2% this year. Speaking at a press conference to launch the latest Inflation Report, the governor of the Bank of England said it had lowered its growth forecasts following the weak growth data at the end of the year.
The Bank of England also said it expected inflation to remain high over the next year. Latest figures released on Tuesday showed that the Consumer Prices Index measure of inflation had hit 4%. This is expected to increase pressure on the Monetary Policy Committee to start raising interest rates.
The Bank of England expects series of interest rate rises this year. The question for many is how far rates will rise. However, interest rate rises will only lengthen the recession. There are also 793,000 people in the 16 to 24 age group who are economically inactive, and are not in full time education. They do not appear in the unemployment figures as, by definition, they are they are not looking for work.