UK unemployment rises

The UK unemployment rate rose again in November, official figures have shown.

It was the first time since 1992 it increased in two successive months.

The number of Britons claiming unemployment benefit rose by 4,800 to 959,100 in November, the Office for National Statistics said.

And using International Labour Organisation methods, the government's preferred measure, unemployment rose by 29,000 to 1.52 million in the three months to October.

The data confirmed that UK unemployment, which has fallen from more than 3 million in the early 1980s to less than 950,000 earlier this year, is back on an upward trend.

But the headline figure, which equates to a rate of 3.2%, shows that unemployment was still significantly lower in the UK than in many other industrialised states, including France where the rate is almost 9%.

Jobs lost

UK manufacturers in particular have continued to lay-off staff, and post office operator Consignia on Tuesday revealed it was axing up to 30,000 jobs.

The number of jobs in production industries plunged by 152,000 in the year to September, the ONS said.

But the headline claimant figure was nonetheless lower than City analysts had forecast, and shares, while lower in morning trade, were little affected by the news.

"It looks as if unemployment is now trending up as we have all been expecting for some time," said Ross Walker at Royal Bank of Scotland.

"We have had negative headlines for some time and it was a surprise that the claimant fell for so long."

Alistair Darling, the UK's Work & Pensions Secretary, said unemployment was still "low" and pointed to a rise of 202,000 over the year in the number of Britons employed.

"We are living in testing times, but although both measures of unemployment have risen [from their lows during summer] they are still significantly lower than they were a year ago," Mr Darling said.

Rate cut hopes

The report also revealed that average UK earnings rose by 4.4% in the three months to October, little changed over the increase for the July to September period, raising hopes of a cut in interest rates.

"Earnings are still below the Bank of England's pain threshold and so no hindrance to future rate cuts," said Jeremy Hawkins, at Bank of America.

"The [Bank] clearly has the room to cut again, the only question now is whether there is the need," he said, predicting a further cut in January or February.