Unemployment up, growth down

It's one of those days: unemployment's broken yet another record - and the Bank of England has revised down its growth forecast.

by Emma Haslett
Last Updated: 06 Nov 2012
It's enough to make MT wish it hadn't got out of bed: figures from the Office for National Statistics have shown that unemployment rose by 129,000 in the three months to September, taking the total up to 2.62m, or 8.3% of the working population - its highest since 1996. Even if you have managed to get (and keep) a job, things aren't exactly rosy: wage inflation has fallen to 2.3%, up from 2.8% in August. But that's not the worst of it: Bank of England governor Sir Mervyn King chose today to announce that he's cutting his prediction for UK growth. Sigh.

It's a sign of the times that hardly an eyebrow was raised when the Royal Mail said recently it had received 110,000 applications for 18,000 temporary Christmas jobs. Most of those will have come from those in the 16 to 24 age group, who have borne the brunt of the rise in unemployment: according to today's figures, 1.02m of them are now out of work. The Government insists it's put measures in place to help 350,000 young people get jobs - clearly, though, we have yet to see any results of that.

(Un)employment minister Chris Grayling was rather stating the obvious when he said the figures are 'bad news', but he did raise questions as to the cause of all this. Merrily extending the finger of blame to the eurozone, Grayling said that 'our European partners must take urgent action to stabilise the position'. Although that's not necessarily the only reason: there's a good chance that the Government's drastic austerity measures, which have received their fair share of criticism, might be to blame. As Paul Kenny, the general secretary of the GMB union, asked: 'Where are all the jobs that were promised to make up for the hundreds of thousands of jobs lost in the public sector?' To be fair to the government, things were looking good for a while - but clearly things have dropped back again.

So probably not the best moment for King to pipe up that the economy's future is looking rather bleak. The Bank of England cut its growth forecasts for 2011 and 2012 to about 1%, adding that the eurozone debt crisis is the 'single biggest risk' to the economy. Tell us something we don't know. Still - there was a glimmer of hope in the form of the outlook for inflation: King said it's 'peaked' and will, in all likelihood, 'fall sharply' over the next few years. Which could even encourage cash-strapped shoppers to dust off their credit cards.

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