Page last updated at 05:01 GMT, Wednesday, 12 November 2008

Further jobless increase expected

John Wells on his search for work

Another big rise in UK unemployment is expected in official figures out later.

The jobless total is expected to pass 1.8 million, reaching its highest level since 1998. The total was 1.79 million in the last figures up to August.

It comes after a day of job cuts. On Tuesday, Virgin Media and Yell axed a total of 3,500 and GlaxoSmithKline said it will close its Kent factory in 2013.

Bank of England economic forecasts also due out are "widely assumed" to be "grim", says the BBC's Nils Blythe.

The forecasts will have been considered ahead of the Bank's 1.5 percentage points interest rate cut last week.

Benefits call

The Office for National Statistics' unemployment figures for the three months to September, as well as the number claiming Jobseeker's Allowance in October, are due out at 0930 GMT.

Last month's figures for the quarter to August showed the unemployment total rise by 164,000, its biggest leap for 17 years.

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BBC business correspondent Nils Blythe says: "The job losses started in the construction industry but are now being felt in finance and manufacturing.

"The expectation is that the knock-on effects will lead to more job losses in businesses like shops, hotels and restaurants."

TUC general secretary Brendan Barber said the unemployment total was rising by an average of more than 1,000 a day.

"But we should never treat these as just statistics," he said.

"Each will be a very human story, and as it gets harder and harder to find new jobs many will now be facing a huge cut in their weekly income with benefits so low."

The TUC wants the government's pre-Budget report, expected next week, to increase unemployment benefits alongside any tax cuts.

Mr Barber said increasing unemployment benefit was "the quickest way to stimulate the economy".

"Jobseeker's allowance is less than 10 a day. Going from a typical wage down to this poverty income will be a terrible shock for people losing their job through no fault of their own."

He added: "With unemployment now climbing every month, there can be no case that poverty level benefits keep unemployment down."

Tax plans

Gordon Brown on Tuesday signalled his backing for unfunded tax cuts as a "fiscal stimulus" to "get the economy moving again".

The prime minister said the UK's "low public debt" meant it could afford to borrow to pump money into the economy.

Conservative leader David Cameron unveiled a proposal to reduce National Insurance payments for firms that hire people who have been unemployed for more than three months.

Mr Cameron said it would be funded from unemployment benefit savings and was "fiscally responsible".

Even if the government were to intervene in a significant way, an increase in unemployment is unavoidable
Simon Kirby, National Institute of Economic and Social Research
Shadow work and pensions secretary Chris Grayling said: "We think we should not walk on by when people are losing their jobs in large numbers."

Liberal Democrat leader Nick Clegg accused his rivals of "timidity" in their tax plans, saying "ambition" was needed to rebalance taxes so the rich paid for "big, permanent and fair" cuts.

Simon Kirby, of the National Institute of Economic and Social Research, told BBC News that, with the UK entering recession, any policy aimed at stemming job losses would have limited impact.

He said: "Any form of fiscal stimulus that would be able to boost, in particular, household consumption, should limit the amount of unemployment that we do see.

"But I think even if the government were to intervene in a significant way, an increase in unemployment is unavoidable."

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