UK unemployment rises to 2.53m
The total number of unemployed people increased by 27,000 in the fourth quarter to reach 2.53m, the highest figure since 1994. The Office for National Statistics (ONS) reported that the unemployment rate for the 16 to 24 age bracket increased by 0.8% in the last three months to reach 20.6%.
The number of unemployed 16 to 24 year olds increased by 30,000 over the quarter to reach 974,000, the highest figure since comparable records began in 1992.
However, the annual earnings growth rate including bonuses rose 2.3%, up from 1.8% for the three months to December 2010.
This increase in the whole economy annual growth rate for total pay was mainly driven by bonus payments in the finance and business services sector.
Despite the rise in unemployment, the number of people claiming Jobseeker’s Allowance fell by 10,200 between January and February 2011 to reach 1.45m.
The total number of male claimants fell by 17,500 on the month to reach 991,300 in February 2011 but the number of female claimants increased by 7,300 to reach 457,300, the highest figure since October 1996.
The number of women aged between 25 and 49 claiming Jobseeker’s Allowance increased by 5,400 on the month to reach 250,400.
The number of economically inactive people aged from 16 to 64 increased by 43,000 over the quarter to reach 9.33m.
Those who were economically inactive because they were looking after the family or home increased by 36,000 on the quarter to reach 2.30m.
David Birne, an insolvency partner at HW Fisher & Company chartered accountants, said: “There is no doubt whatsoever that unemployment will continue to rise from 2.53m throughout 2011 and into 2012. It’s still early days in terms of public sector job cuts while the private sector is in dire straits.”
Birne added that while some employers are keen to hire new workers, they are financially unprepared to take on additional staff with the banks becoming more cautious over lending to businesses.
“Some people take reassurance from the fact that there has been a slowdown in the number of company insolvencies. They shouldn’t, because this is not a sign of the increased health of the private sector.
“The reason for the slowdown is that nobody is putting pressure on struggling businesses. The banks, the Revenue and other creditors know that if they take companies down they will get nothing back,” he explained.