Jobless total hits 17-year high

Unemployment reached a 17-year high today after a 118,000 increase in the jobless total, which saw a record number of young people out of work.

The figure jumped to 2.68 million in the three months to November, the worst since the summer of 1994, giving the UK a jobless rate of 8.4%.

The number of unemployed 16 to 24-year-olds increased by 52,000 over the quarter to 1.04 million, the highest since records began in 1992.

And the number of people claiming jobseeker’s allowance in December increased by 1,200 to 1.6 million, the highest for a year after the 10th consecutive monthly rise.

Other figures showed that almost a million working days were lost in November as a result of the public sector pensions strike, the highest figure since 1989.

The Office for National Statistics reported that the number of people in full-time employment fell by 57,000 in the latest three months, but there was a 75,000 increase in part-time workers.

There was a 44,000 rise in the number of people working part-time or for themselves because they could not find a full-time job, taking the total to 1.3 million, the highest since comparable records began in 1992.

Employment increased by 18,000 to 29.12 million, while the number of people classed as economically inactive fell by 61,000 to 9.29 million, a rate of 23.1%.

The fall was mainly due to fewer women looking after a family or home, and fewer retired people under the age of 65.

Unemployment increased evenly among men and women in the latest quarter, while the number of people out of work for longer than two years increased by 1,000 to 424,000.

There was a 10,000 fall in the number out of work for more than a year to 857,000.

Average earnings increased by 1.9% in the year to November, down by 0.2 percentage points on the previous month.

John Salt, director at recruitment firm totaljobs.com, said: “Whether or not the UK is technically in recession, for those out of work the situation is already dire enough.

“Today’s figures merely confirm what our barometer has been telling us for three months now, that applications per job are at an all-time high of 23, with not enough growth in the labour market to absorb the numbers being laid off. What’s more, the signs for 2012 just aren’t good.

“The eurozone crisis threatens not only jobs reliant on exports but also in the financial services industries. With retail already struggling following a lacklustre Christmas, it is difficult to see sectors in which we’re going to see significant increases in available jobs.”

Paul Kenny, general secretary of the GMB union, said: “This rise in unemployment was made in Downing Street. The truth is that jobs are haemorrhaging in the public and private sectors and no one in the Government seems to know what to do to stop this.

“There are parts of the country in such despair that more than a quarter of households with people of working age have no one in work.

“The number one political priority has to be securing a reduction in unemployment.”

Employment Minister Chris Grayling said: “The overall level of unemployment is, and will remain, a major concern for the Government.

“The latest figures reflect the current challenging economic climate but also show more women entering the workforce and more students looking to supplement their income through work.

“When you take into account our welfare reforms, the number of jobseeker allowance claimants has actually fallen.

“Despite the exceptionally difficult economic circumstances, finding work for the unemployed will remain top of the Government’s agenda.”

Chancellor 'confident' on economy

Chancellor George Osborne has insisted the Government was doing everything possible to "weather the storm" as economic forecasters warned the UK is likely to be already in recession.

The Ernst & Young ITEM Club and the Centre for Economics and Business Research both believe that gross domestic product (GDP) shrank in the final quarter of last year and will fall again in the first three months of 2012. A recession is defined as two consecutive quarters of contracting output.

Mr Osborne said the most recent predictions by the Office for Budget Responsibility, which issues official forecasts, showed that Britain would have a negative quarter of growth but not go into recession.

He told BBC Radio 4's Today programme: "That's their forecast, but they were the first to say that it is very uncertain and one of the biggest risks to the British economy is the further deterioration of the eurozone crisis.

The Government is doing everything it can to deal with the economic crisis, Chancellor George Osborne has said

"I said openly at the end of November to the House of Commons when I made my autumn statement that if the eurozone were to go into a deep recession, that would have a real impact on the British economy.

"I'm confident the British Government is doing everything it can with a very difficult inheritance, facing a very difficult international situation to get Britain through this, to weather the storm."

The warnings come shortly after France, the second biggest economy in the eurozone, saw its AAA credit rating downgraded by Standard & Poor's in a move which signals more troubles for the single currency bloc.

Professor Peter Spencer, chief economic adviser to the Ernst & Young ITEM Club, said: "Figures for the last quarter of 2011 and the first quarter of this year are likely to show that we are back in recession and we are going to have to wait until this summer before there are any signs of improvement. But it's not going to be a repeat of 2009 - we are not going to see a serious double dip."

The ITEM Club report forecasts GDP growth of just 0.2% this year before increasing to 1.8% in 2013 and 2.8% in 2014. It said deteriorating levels of confidence will see business investment stagnate in 2012, while export prospects have already slowed.

But the group said UK companies have stronger balance sheets than in 2009 and have built up large cash stockpiles, which will provide a useful insurance policy if the situation deteriorates further.

©Press Association

YOUTH UNEMPLOYMENT LINK QUESTIONED WITH IMMIGRATION

The link between immigration from Eastern Europe and youth unemployment was questioned in a report by campaigners today.

The number of migrants working in the UK who were born in Eastern Europe rose by 600,000 since the so-called A8 countries joined the EU in May 2004, while youth unemployment rose by almost 450,000 in the same period, Migration Watch UK said.

Sir Andrew Green, the campaign group's chairman, said it would be "a very remarkable coincidence if there was no link at all between them".

Sir Andrew Green - blames immigration for higher youth unemployment

Migrants from the A8 countries - Poland, the Czech Republic, Hungary, Slovakia, Slovenia, Estonia, Latvia and Lithuania - "have tended to be disproportionately young, well-educated, prepared to work for low wages and imbued with a strong work ethic", he said.

Youth unemployment in the UK increased from 575,000 in the first quarter of 2004 to 1,016,000 in the third quarter of 2011, figures from the Office for National Statistics (ONS) show.

Over the same period, the number of workers from the A8 grew by 600,000.

Sir Andrew conceded that measuring any impact of immigration on youth unemployment was "not an exact science".

He said: "Correlation is not, of course, proof of causation but, given the positive employability characteristics and relative youth of migrants from these countries, it is implausible and counter-intuitive to conclude - as the previous Government and some economists have done - that A8 migration has had virtually no impact on UK youth unemployment in this period.

"We hear a great deal from employers about the value of immigrant labour, especially from Eastern Europe, but there are also costs some of which have undoubtedly fallen on young British born workers."

A Home Office spokesman said: "This Government is working to reduce net migration from the hundreds of thousands to the tens of thousands, levels we last saw in the 1990s.

"Controlled migration can bring benefits to the UK economy, but uncontrolled immigration can put pressure on public services, infrastructure and community relations.

"That is why we are ensuring graduates and the workforce get the opportunities and skills they need so that they can find work, and why we have maintained restrictions on workers from Romania and Bulgaria, and made it clear we will always introduce transitional controls on new European Union member states to stop unregulated access to British jobs."

Danny Sriskandarajah, director of the Royal Commonwealth Society, told the BBC Radio 4 Today programme he was sceptical about the impact immigration had had on the youth unemployment figures.

And he said: "The challenge here is to skill up young people to get them into the jobs they want to get.

"The fundamental issue here I think is about matching the right skills and motivations with the right jobs in the economy - we have a supply side problem.

"We don't necessarily have the jobs in the economy that young British people want. If we do want to tackle youth unemployment then we perhaps need to think about structural reforms in the economy so we don't create these dirty, dangerous jobs that immigrants are being attracted into."