Page last updated at 09:40 GMT, Wednesday, 17 September 2008 10:40 UK

UK unemployment total rises again

Redundant workers leave an Electrolux plant in Spennymoor last December after its closure was announced
More workers are likely to lose their jobs this year

The number of people out of work in the UK rose by another 81,000 between May and July, to 1.72 million, according to government figures.

That took the official unemployment rate up from 5.3% to 5.5%.

The number of people claiming jobseeker's allowance also rose, by 32,500 to 904,900 in August, the Office for National Statistics (ONS) said.

In a further sign of the economic slowdown, the number of people in work and the number of vacancies both fell.

"Today's figures show that unemployment is starting to accelerate and it now looks very likely that total unemployment will reach two million during 2009," said the TUC's general secretary Brendan Barber.

"It is clear that deflation is a much more pressing threat than inflation, and interest rates should be cut," he added.

Earlier on Wednesday, the TUC warned that the number of people out of work for a year or more could almost double by the end of 2009.

The rise in the headline rate of unemployment to 5.5% took it to its highest level since early 1999.

With unemployment rising, people are looking to the government for a response

Brendan Barber, TUC general secretary

The increase in the claimant count was the seventh in a row and was the biggest monthly rise since December 1992 - during the UK's last economic recession.

The past few months have seen a steady flow of big redundancy announcements at employers such as major house builders and financial services companies affected by the credit crunch.

More recently there have been job losses at Ford, travel firm XL and the investment bank Lehman Brothers, while the nationalised mortgage bank Northern Rock is in the process of shedding 1,300 jobs.

The ONS revealed that the rising unemployment trend has accelerated sharply in the past few months.

In the three months to July 138,000 people were made redundant, up from 28,000 in the three months to April.

"The biggest jump in unemployment for 16 years shows that the weakness in the real economy is feeding through into the jobs market," said Andrew Goodwin, from the Ernst & Young ITEM Club.

"Falling employment and vacancies point to further increases in unemployment over the coming months.

"It is clear that employers' demand for labour is weakening in the face of the economic slowdown and the likelihood is that unemployment will rise further in the months ahead," he added.

The ONS also revealed that in the three months to July, the number of people in work fell by 16,000 from the previous quarter, to 29.54 million, though this was still 333,000 higher than a year ago.

Likewise, the employment rate fell by 0.2 percentage points from the previous quarter to 74.7%, but this was still 0.2 percentage points higher than during the same period last year.

Unemployment from Jan 1998 to July 2008

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