UK unemployment total increases to 2.5m

Employment Minister Chris Grayling: "Difficult road" to economic recovery

Unemployment in the UK increased by 35,000 in the three months to October to 2.5 million, the Office for National Statistics (ONS) has said.

It is the first time that the jobless measure has risen for six months.

The surprise increase was driven by public sector job losses, and pushed the unemployment rate up to 7.9%.

However, the number of people claiming Jobseeker's Allowance in November fell fractionally, by 1,200 to 1.46 million, the ONS said.

At Prime Minister's Questions in parliament, Labour leader Ed Miliband claimed that in light of the latest jobs data, the government's claim that the UK economy was out of the danger zone "rings hollow".

David Cameron pointed to the fall in unemployment benefit claimants and a rise in job vacancies, and claimed that the coalition was about to launch the "biggest back-to-work programme for 70 years".

Public vs private

The rise in the number of jobless was almost entirely driven by the public sector, where employment fell 33,000, according to the ONS's latest monthly labour market report.

However, the private sector failed to take up the additional slack, with employment remaining unchanged.

Unemployment map

The government is relying on private sector job creation to offset an estimated 330,000 public sector redundancies over the next four years due to government austerity measures.

But David Birne, insolvency practitioner at accountants HW Fisher, describes this view as being out of touch with what is happening on the ground.

"For the UK's businesses and their employees, 2011 is shaping up to be harsher than any of the past three years," said Mr Birne.

Start Quote

The ONS statistical release reads as if it was scripted by the Grinch who stole Christmas”

End Quote Dr John Philpott Chartered Institute of Personnel and Development

"This time next year we expect unemployment to be considerably higher than it is at present, as many more of Britain's companies go to the wall. We deal with companies of every size and from every sector day in, day out and for a large chunk of them things are looking very bleak indeed."

But the government was keen to defend the need for austerity to stabilise public finances.

"It's a long road towards restoring sustainable economic strength in this country," Employment Minister Chris Grayling told the BBC.

"You only get the private sector creating jobs if they have confidence in the direction of the economy, and they have confidence that the country will be stable economically."

Disappointment

The data could also heighten the policy dilemma for the Bank of England, coming only a day after figures showed consumer price inflation had risen to 3.3%, well above the Bank's 2% target.

Start Quote

The figures are disappointing, but the bigger surprise would have been if we had seen another massive rise in the number of jobs, at a time when many employers still have doubts about the future of the recovery. ”

End Quote

In recent meetings, the Bank's monetary policy committee has been split three ways, with one member voting in favour of gradual interest rate rises to head off inflation, while another has voted to increase the Bank's purchases of government bonds in order to boost the recovery.

The unemployment figures do not bode well for 2011, according to Dr John Philpott, chief economic adviser at the Chartered Institute of Personnel and Development (CIPD).

He found it especially disappointing that the positive momentum built up over the summer appears to have run out of steam before the full impact of government austerity has been felt.

While noting another slight fall in the number of people claiming Jobseeker's Allowance and a tiny increase in job vacancies, he said "the remainder of the ONS statistical release reads as if it was scripted by the Grinch who stole Christmas".

Part-timers

Pay - excluding bonuses - was up 2.2% on a year earlier, some way below the inflation rate, meaning that the purchasing power of wages continued to fall on average.

Another source of concern for many analysts is the growing inability of workers to find full-time jobs:

  • the number of people employed full-time fell 58,000, offset by a 26,000 increase in part-time workers
  • a record 1.16 million workers said they were working part-time because they could not find enough work
  • the number of temporary workers who could not find permanent jobs also hit a new high of 592,000
  • there was also a 22,000 increase in the number of people of employment age not seeking work - meaning they are not counted as unemployed - mainly due to an increase in early retirement.

"Until full-time jobs start to increase again the labour market will not be able to absorb large-scale job losses in the public sector," said Ian Brinkley, associate director of the Work Foundation. "Unemployment in 2011 must then inevitably rise."

Gender divide

Unemployment breakdown

  • North East: 124,000 (9.7%), up 6,000
  • North West: 279,000 (8.1%), up 2,000
  • Yorkshire/Humber: 244,000 (9.3%), up 1,000
  • East Midlands: 188,000 (8.2%), up 19,000
  • West Midlands: 238,000 (8.9%), up 12,000
  • East: 202,000 (6.7%), down 2,000
  • London: 376,000 (9.1%), down 4,000
  • South East: 276,000 (6.2%), up 3,000
  • South West: 154,000 (5.7%), down 8,000
  • Wales: 125,000 (8.6%), up 4,000
  • Scotland: 234,000 (8.7%), down 5,000
  • N Ireland: 63,000 (7.6%), up 6,000

Source: ONS

Across the UK, among the worst-hit areas were Yorkshire, the North East and Northern Ireland, all of which already suffer unemployment rates over 9%, and saw big drops in total employment.

The Midlands saw the biggest jump in unemployment, up by 0.5 percentage points in the West Midlands and 0.8 in the East, to 8.9% and 8.2% respectively. Unemployment in Wales rose slightly, by 4,000.

London, the East and Scotland saw their unemployment rates fall slightly, while the South West remains the UK's jobs outperformer, seeing its unemployment rate fall 0.3 percentage points to just 5.7%, the lowest in the UK.

The data suggests that women are doing worse than men. The number of female benefit claimants rose by 4,800, compared with a 6,000 drop in male claimants.

The percentage of women aged 16 to 64 in work dropped 0.2% to 65.5%, while for men the rate was unchanged at 75.8%.

Read some of your comments about this story:

I am a solicitor and was made redundant in March. I signed on to get jobseeker's allowance but can't claim any other benefits because my husband earns money. I cannot get mortgage relief or council tax relief for the same reason. I have been a high-rate taxpayer all my life and now I'm not entitled to anything. I go to the JobCentre every two weeks to get my NI stamp paid and they are completely unprepared for people like me, professionals looking for a job. It's very frustrating, the lack of help. I have been looking for a job since March, but I specialise in commercial property and my sector was hit really hard by the recession. I have had a couple of interviews, but the companies ended up recruiting internally or decided they didn't want anyone for the job. I'm also finding it difficult because I have been working for ten years, and the law firms are looking for junior staff. It is really difficult when you have been working for a long time in such a niche area.

Debbie Hudson, Bristol

A 22,000 increase in the number of "inactive" people". How did you estimate this figure, I wonder? Last year when my husband fell into this category I made him sign-on even though he did not qualify for benefit because I felt he should be counted as seeking work. I bet the figure is really larger.

J Rickard, Brighton

I am unemployed and find that the Job Centre is completely unhelpful with badly-designed systems and so-called advisors who have nothing to offer whatsoever. I have three interviews over the next three working days, all for posts found and applied for independently of them, and the surly individual who I saw yesterday to sign on didn't even wish me good luck, let alone show any interest in my attempts to find work.

Megan, Cheshire

I'm an airline pilot and have been unemployed for nearly a year. Because the last job I had was on a self-employed basis, I've not been able to claim any benefits and have therefore failed to register anywhere in any government unemployment statistics. As far as 'the system' is concerned, I simply don't exist! I suppose I would be classified as 'economically inactive' but I'm not sure how 'the system' tracks down individuals like me. Thankfully, my wife has been able to increase her working part-time hours and we have some other sources of income. But we have a daughter at university in London and after paying her accommodation and living expenses, a sizeable chunk of income has gone. At the age of 53, with potentially another 12 years flying left, and with the airline industry at an all-time low ebb in terms of pilot recruitment, I seriously doubt if I shall occupy a cockpit again. I even went to South Africa last month to start a job only for the company to close five days after arrival. It makes one wonder how far one has to get on one's bike to get a job.

Paul Kiver, Peel, Isle of Man

I was made redundant from my local authority in March this year at 55. I took an early retirement and redundancy package and with my savings have no need to seek work again. I wonder if I appear in these statistics.

Kevin Wilkins, Coventry

I have recently been made redundant from a company I have worked at for 23 years. I have tried to claim jobseeker's allowance but was given misinformation and as a result I am not claiming anything as my wife works full time and we have two children - one is 16-years-old and the other one is five. I cannot get any advice anywhere, I want to work but need more than minimum wage to survive, as I am not currently claiming am I classed as unemployed? Do I show on the government figures? I know of many in the same situation, is this how Job Centres meet their targets?

Stephen Byrne, Kirkby, Merseyside

I recently lost two job contracts in the public sector and now face unemployment as local authorities make large numbers redundant and refuse to take on contractors in any shape or form. My contract was delivering a cheap-to-run scheme that gave economic benefit to local businesses by getting them extra work while protecting consumers from rogue traders. Unemployment is set to seriously spiral out of control in the UK as there aren't equivalent private sector jobs to take up the slack and any politician who says otherwise is completely deluded.

Dave, Romford

I lost my job over a year ago. I looked for another job at the time and couldn't find anything. I had to sign-on once but signed off again that day as I had been offered something else. I had to have a crisis loan to eat. I have significant debts and I struggle to make the monthly repayments. JSA just isn't enough to cover it. I'm lucky in the fact that I was able to return to my mum's and live there but I still have huge problems. After a week I registered as self-employed and joined a party plan company. It keeps me going but the income is extremely variable and can't be relied upon. However, it's always more than I would get on benefits. I've been jobseeking ever since but unable to find anything. I do the odd day temping but this is rare. I am hoping to find something in the new year. I have experience in a lot of different fields and what I've been told is a good CV. Wish me luck!

Nikki Lovegrove, Monmouth

I am a graduate and have been unemployed for the last two years. It is so difficult to find work as when I tell employers I am a graduate, they seem to loose all interest. They do not seem interested when I mention that I am dyslexic although this did not stop me from gaining a 2.1. The JobCentres do not seem to want to help and indeed do much to hinder me. I do not expect to find work next year the way things are looking with the economy. A pity the government does not do more to help unemployed people with disabilities who want to work.

Nick, Staffordshire

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