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Last Updated: Wednesday, 16 August 2006, 13:21 GMT 14:21 UK
UK jobless rate continues to rise
Two men looking for jobs at a Job Centre in London
Unemployment has been rising steadily despite economic growth
Unemployment has continued to rise, with the number of people out of work increasing by 92,000 to 1.68 million between April and June.

The number claiming unemployment benefit rose by 2,000 to 957,000 in July, figures from the Office for National Statistics (ONS) have shown.

The UK's unemployment rate was 5.5% during the quarter, up from 5.2% in the previous three months.

Average earnings rose 4.3% in the year to June, up from 4.1% in May.

Energy costs

The jobless rate of 5.5% compares with a rate of 4.8% at the same time last year, despite the UK economy displaying relatively strong growth.

The recently improved growth in the economy is still not generating enough jobs to meet the expanding labour force
Howard Archer, Global Insight

Manufacturing has been hardest hit by a sharp rise in production costs caused by soaring energy bills.

Over the past year, more than 100,000 jobs have been lost in manufacturing, according to ONS data.

However, the number of people in work - and the number of job vacancies available - have both continued to rise.

The number of people in employment rose by 42,000 over the past three months, while job vacancies rose by 7,600.

Generating jobs

Over the past year, the labour force - encompassing those in work and looking for work - has expanded by 483,000.

The increase is due to growth in the working age population, pensioners returning to work and a decline in the number of people incapacitated by long-term illness.

Of those 483,000, 240,000 are now in work while 242,000 are unemployed.

Analysts said the Bank of England would take note of the rise in wage inflation, in case it threatened the overall inflation picture.

"If earnings continue to creep up, the odds of another interest rate hike before the end of the year will become ever more likely," said Howard Archer, chief economist at Global Insight.

"The unemployment data continue to show both employment and unemployment rising as the recently improved growth in the economy is still not generating enough jobs to meet the expanding labour force," he added.

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