Business

UK unemployment rises by 28,000 to 2.67m, ONS reports

  • 14 March 2012
  • From the section Business

UK unemployment rose by 28,000 to 2.67 million during the three months to January, with the unemployment rate at 8.4%, according to figures from the Office for National Statistics (ONS).

Unemployment amongst women accounted for most of the increase.

The government said the data showed the situation was "stabilising" but Labour said ministers were being "complacent".

The number of people claiming Jobseeker's Allowance increased by 7,200 to 1.61 million in February.

Encouraging

The rise in unemployment was the lowest in almost a year.

"This is a more encouraging set of figures, with signs that the labour market is stabilising," said Employment Minister Chris Grayling.

Labour said government schemes for creating jobs were failing.

"Britain's jobs crisis shows no signs of letting up, yet complacent ministers are failing to act," said shadow work and pensions secretary Liam Byrne.

Part time jobs

The figures also showed another increase in the number of part-time jobs.

Part-time employment rose by 59,000 to 6.6 million and full-time employment fell 50,000.

The number of people working part-time because they could not find a full-time job increased by 110,000 to its highest level since records began in 1992.

"The new jobs being created are mainly part-time. These jobs are not paying enough to replace the full-time earnings that people need," said TUC general Secretary Brendan Barber.

Earnings 'surprise'

Average earnings increased by 1.4% in the year to January, down from a rate of 1.9% in December.

The ONS figures also showed a small increase in the number of people in work - up by 9,000 in the three months to January.

"The unemployment figures aren't too bad in the sense that the level of joblessness remains high, but the level appears to have flattened out," said Philip Shaw from Investec.

"What is a surprise is the weakness of pay growth, with the drop in the rate of headline earnings down to 1.4%," he added.

Austerity impact

Employment in the public sector continued to fall, according to separate figures also released by the ONS.

Public sector employment fell by 37,000 in the final quarter of 2011 to just under six million.

Public sector employment has fallen by 270,000 in total over the year.

However, the number of people employed in private sector firms increased by 45,000 to 23 million in the final three months of 2011.

"Unsurprisingly, the public sector is bearing a considerable brunt of the pain with the austerity measures continuing to take their toll," said Matt Gascoigne, from recruitment consultants Badenoch and Clark.

The unemployment news follows some more positive data for the UK economy.

Retail sales rose by a surprise 0.9% in January as fears of a recession faded.

Positive data

"Overall, the outlook is still quite downbeat," said Nida Ali, economic advisor to the Ernst & Young's ITEM Club.

"Although there has been a raft of recent positive data for the UK economy in the early months of 2012, the improvement is unlikely to be enough to create more jobs."

Recent news on employment has been mixed.

On Tuesday Lloyds and Royal Bank of Scotland announced 1,900 job cuts between them.

However Jaguar Land Rover said it would create 1,000 new positions in Britain and Tesco has also announced plans to hire new staff.

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