The official unemployment count jumped by 165,000 to 2.03m in the three months to January, according to figures from the Office for National Statistics released this morning – that's the highest figure since 1997. The number of people claiming unemployment benefits also soared at a record rate: another 138,000 joined the dole queues during the period, taking the total claimant count to 1.39m. And with the UK economy apparently expected to recover at a slower rate than everywhere else in the developed world, the total count is likely to top 3m before next year is out...
The unemployment rate, which now stands at 6.5% of the working population, is already the highest since Labour came to power, while job vacancies are at their lowest level since records began in 2001 (according to the TUC, there are now 10 applicants for every new role). And the bad news will keep on coming: most economists expect the jobless count to spiral as more companies go out of business, with the British Chambers of Commerce suggesting today that we could see 3.2m people out of work in 2010 (it’s now arguing for temporary wage subsidies).
Today’s ONS figures show that the pain has so far been confined to the private sector – believe it or not, public sector employment actually rose by 30,000 to 5.78m last year, even as private sector employment fell by over 100,000. All regions have been affected: the North-East now has the highest unemployment rate, with 8.6% of the working population out of a job, although Wales is catching up fast – its rate jumped 2.7% to 7.6% during the three-month period, the biggest rise in the UK. And older staff appear to be bearing the brunt: unemployment among the over-50s has jumped by more than a third in the last year, a fairly shocking leap.
And if all this wasn’t bad enough for the Government, the International Monetary Fund warned today that the UK recession will be deeper and longer than in any other big developed economy. It’s predicting that the UK economy will contract by 3.8% in 2009, worse than the US or the Eurozone, and will contract by a further 0.2% in 2010, even as the rest of the G7 return to growth. So there’s not much chance of the employment picture recovering any time soon.
If nothing else, the current crisis should be a good gauge of the UK labour market, which is supposedly more flexible and less regulated than most of those in Europe. If so, you’d expect the unemployment rate to rise more quickly but also recover more quickly. With an election looming, the Government will be praying that’s true.
In today's bulletin:
FSA's Turner promises to get tough on banks
Unemployment tops 2m for first time in 12 years
FCUK profits - French Connection reports £17m loss
Debate: Bonus culture - force for good or unnecessary evil?
MT writers recognised at HR journalism awards