U.K. jobless rate hit 8.1% in June-August period, up from 7.9% in May-July period and the highest rate in 15 years
October 12, 2011
– Unemployment in Britain has risen to 8.1 percent, the highest rate in 15 years, while the number of young people without jobs has hit a record high, official data showed Wednesday.
The unemployment figure reported for the June-August period by the Office for National Statistics compared with 7.9 percent for May-July, reported a month ago. The latest figure was higher than the market consensus forecast of 8.0 percent.
The last time the jobless rate was higher was in May-July of 1996.
"The situation is likely to get worse in coming months," said Chris Williamson, chief economist at financial data company Markit. "Recruitment agencies reported that demand for staff at employers had risen at the weakest rate for two years in September."
A recent stream of dire economic data led the Bank of England last week to commit 75 billion pounds ($118 billion) to a revived program of economic stimulus through asset purchases. The program essentially creates new money in the economy in the hope banks will use it to boost lending to businesses and households.
Wednesday's figures showed 991,000 people aged between 16 and 24 were without a job, the highest since records began in 1992.
The number of people claiming unemployment benefits increased by 17,500 in September to 1.6 million, while the number of people with jobs fell by 178,000 compared with the previous three months, the sharpest drop in two years.
Total pay including bonuses was 2.8 percent higher than a year ago, well behind the current inflation rate of 4.5 percent.
"With inflation still rising, steep falls in real wages are set to put further intense downward pressure on consumer spending and overall economic growth over the coming quarters," said Jonathan Loynes, chief European economist at Capital Economics.
Prime Minister David Cameron's government has hoped that private-sector job growth would compensate for cuts in public employment, but the data show this is not happening. Government jobs decreased by 110,000 between March and June while private companies added only 41,000 employees.
"In the middle of the worst international recession for 80 years, the government itself is creating unemployment, with 250,000 public sector posts already gone and still more to come," said Paul Kenny, general secretary of the GMB union.
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