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Wednesday, 14 November, 2001, 11:37 GMT
Back to rising unemployment
UK unemployment graph
UK unemployment is climbing again after nearly a decade, as the global economic slowdown bites.

Manufacturing job losses
100,000 so far this year including:
4,600 in aero engineering
1,700 in electronics/mobile phones

Source: GMB union

Figures released on Wednesday show the number of people out of work and claiming benefit increased by 4,300 in October to 951,000.

The government is insisting there are enough vacancies in the system to rule out a return to high unemployment.

But critics say the increasing gap between the UK's buoyant service sector and manufacturing, which is already in recession, is causing serious problems.

'Don't panic'

Apart from an isolated increase in October last year, claimant count unemployment has been falling since 1992 and stood at just over 940,000 in September, a jobless rate of 3.1%.

The UK economy is in a very strong position. We have the lowest rates of unemployment in the Western world

Nick Brown, employment minister

However, an alternative measure of unemployment which tries to include those people not drawing benefits, went up by 28,000 between July and September to 1.51 million, according to the Office for National Statistics.

Analysts have been predicting a rise in the claimant count for some months, as big job losses in manufacturing feed through into the dole queue.

But employment minister Nick Brown urged people not to panic.

"The UK economy is in a very strong position," he told BBC News 24.

Mr Brown reassured those who had lost their job that the government would do all it could to help them find another one.

"The government is there to help, to stand in their corner, to get them into the jobs that we know are there, in a UK economy that is very strongly placed," he said.

'National crisis'

But Roger Lyons, general secretary of the Manufacturing Science and Finance union, said Wednesday's figures still did not take into account some of the huge job cuts announced in recent weeks by firms including Rolls-Royce and the Prudential.

"It is an indication that we are on the brink of a national economic crisis.

"The Prime Minister has asked people to spend for Britain - we believe the most patriotic thing employers can do is hold on to their staff during this crisis for the good of the economy."

Manufacturing losses

Manufacturing job losses have increased by more than 30% in the wake of the 11 September atrocities in the United States, according to a survey by the GMB union.

Roger Lyons, general secretary MSF union
Lyons: 'we are on the brink of a national crisis'
Redundancies in the sector topped 10,500 last month compared with 7,600 in September, research found.

Almost 100,000 manufacturing jobs have been lost this year, said the report.

Among the hardest hit sectors were aero engineering, where 4,600 jobs have been axed, including 3,800 at Rolls-Royce, electronics and mobile phone manufacturing, where 1,700 jobs have been lost.

But some sectors of the economy, such as retail, are continuing to grow strongly.

DIY giant B&Q announced plans on Wednesday to create 4,000 jobs over the next year.

Wage increases slow

Separate figures released on Wednesday show average earnings increased by 4.4% in the year to September, down by 0.1% against previous month.

This will add to the downward pressure on inflation already present in the economy, which could pave the way for further cuts in interest rates.

The underlying rate of inflation in the UK remained unchanged last month at 2.3%, below the government's target rate of 2.5%, figures showed.

The BBC's Jeff Randall
"Today's figures are dispiriting for those looking for work"
See also:

14 Nov 01 | Business
Unemployment figures explained
14 Nov 01 | Business
B&Q to create 4,000 jobs
13 Nov 01 | Business
UK inflation holds steady
18 Sep 01 | Business
UK rates cut to 1960s levels
17 Oct 01 | Business
UK unemployment continues to fall
14 Nov 01 | Business
UK economy set to slow
19 Sep 01 | Business
Bank considered UK rate rise
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