Page last updated at 18:35 GMT, Wednesday, 11 November 2009

Rise in UK unemployment slowing

Employment Minister Jim Knight explains the figures

The number of people unemployed in the UK rose again in the three months to September, although the 30,000 increase was the smallest since May 2008.

Unemployment totalled 2.46 million in the quarter, the Office for National Statistics (ONS) said.

The jobless rate edged up to 7.8% from 7.7%, but the youth unemployment rate rose to 19.8%, a record high.

The number of people claiming unemployment benefit rose by 12,900 to 1.64 million in October.

There is some evidence of stabilisation but it remains to be seen just how durable this proves to be
Ross Walker, RBS Financial Markets

This was the smallest monthly increase in 18 months.

Youth unemployment

The ONS figures showed that the number of people out of work for longer than a year rose by 71,000 to 618,000 in the three months to September, the highest level for 12 years.

At the same time, the number of people in work increased by 6,000 to 29 million, the first quarterly rise since the summer of 2008.

Youth unemployment, measuring the number of 16 to 24-year-olds out of work, rose by 15,000 to 943,000.

However, more than a quarter of 16 to 24-year-olds classed as unemployed are actually in full-time education; they are counted as unemployed if they look for as little as one hour's work a week.

Martin Shankleman, employment correspondent

While these figures are obviously bad, they are not as dreadful as feared and suggest that the surge in unemployment is starting to flatten out.

The quarterly rise in the jobless figures, according to government's favoured measure, is showing the smallest quarterly increase in 18 months and the overall total has still not breached 2.5 million, as had been widely expected earlier this year.

At the same time, the number of people in work has started to rise, the first time that happened since the recession started.

However, a little digging beneath the surface reveals other more grim findings. The rate of youth unemployment has reached a record level of 18%. The number of people classed as economically inactive has hit a new all-time high of 7.98 million. And the total of vacancies in the economy continues to shrink.

While there is some evidence of the labour market showing signs of life, the jobs being created are part-time, and being taken by women, rather than spread between the sexes.

Ross Walker, UK economist at RBS Financial Markets, said the latest official figures were "better than expected".

However, he added: "There is some evidence of stabilisation but it remains to be seen just how durable this proves to be.

"It feels both too soon to expect any sustainable increase in total employment and certainly the GDP data suggest that we should still be, under normal circumstances, six or maybe nine months away from that."

Mandi O'Shea, managing director of Scientiam, a not-for-profit training provider in Liverpool, said the record rise in youth unemployment was the main concern.

"Young people are bearing the brunt of this vicious recession," she said.

"There is a lost generation of young people, particularly in the 16-18 age group, coming out of school and being dumped straight onto the jobless scrapheap."

'Grim figures'

The government welcomed the fact that the rise in unemployment had slowed.

"The fact that unemployment is significantly lower than everyone forecast at the beginning of the year shows the support for the economy is making a real difference," said Work and Pensions Secretary Yvette Cooper.

However, shadow work and pensions secretary Theresa May said the latest unemployment statistics were "yet more grim figures for Britain".

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% of population claiming Jobseeker's Allowance, by parliamentary seat

"Labour has written off a generation of young people with one in five now unable to find a job," she added.

Steve Webb, work and pensions spokesman for the Liberal Democrats, said it was a "national disgrace" that one in five young people were now unemployed.

The ONS figures also revealed that average earnings, excluding bonuses, rose 1.8% between July and September from a year earlier. This was the lowest annual growth rate since at least 2001.

When bonuses are included, average earnings rose by 1.2% from a year before.

Bank of England governor Mervyn King said on Wednesday that the UK had "only just started on the road to recovery" as he presented the Bank's latest quarterly inflation report.

Last week, the Bank decided to pump an extra £25bn into the economy under its quantitative easing (QE) programme, which aims to restore both commercial lending and economic growth.

David Kern, chief economist at the British Chambers of Commerce, said the latest unemployment data indicated the need for the Bank to continue with a "forceful QE programme", and "in conjunction with the government, supplement this with specific measures aimed at stimulating bank lending to credit-worthy businesses".

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