Jobless total hits 17-year high

UK unemployment rose by 27,000 in the three months to the end of January to 2.53 million, the highest since 1994.

The Office for National Statistics (ONS) said the jobless rate was now 8%, the highest since 1996.

However, the ONS figures also showed that the number of people claiming jobseeker’s allowance fell by 10,200 in February to 1.45 million.

Another record high was reached in the unemployment rate for 16-24 year olds, up by 0.8% to 20.6%.

This figure, however, does include students who are looking for work.

The unemployment rate for 18-24 year olds was also at an all-time high at 18.3%.

The ONS report also shows that average earnings in January were 2.3% higher than a year ago, the ONS figures showed, mainly driven by bonus payments in the finance and business services sector.

Wage growth, although higher than expected, is well below the level of growth the Bank of England finds concerning and is unlikely to put pressure on the Bank to raise interest rates.

Average pay including bonuses was £453 a week.

Public sector cuts

The jobs data showed that number of people in work increased by 32,000 to 29.16 million, the highest figure since last autumn.

A record number of 50-64-year-olds were in work – their numbers rose by 25,000 to 7.3 million.

Public sector employment fell by 45,000 in the final quarter of 2010 to 6.2 million, even before the full impact of the government’s spending cuts started to take effect.

Local government employment fell by 24,000, central government by 9,000 and Civil Service by 8,000, while employment in private firms increased by 77,000 to almost 23 million.

There were almost half a million job vacancies in the three months to February, up by 24,000 over the previous quarter, although without the 29,000 temporary jobs needed for this year’s census, the number of vacancies would have fallen.

‘Broad change’

The Employment Minister, Chris Grayling, said: “Clearly any increase in unemployment is unwelcome and a disappointment and it underlines the need for a Budget next week which focuses on growth, on creating an environment where businesses are growing and developing and creating jobs. But it is a mixed picture.”

He said the data underlined the need to press ahead with policies to stimulate growth in the private sector.

Investec economist Philip Shaw, said: “The fall in the claimant count was better than expected, but still not miles away from the broad trend of being largely unchanged over the last six months or so.”

The level of unemployment rose in Wales by 2,000, by 4,000 in Northern Ireland and by 38,000 in England. However, unemployment dropped by 16,000 in Scotland.