Unemployment on the rise

The number of people out of work in the UK has risen again. It is at its highest level in 14 years, official figures have shown. This is now the highest since May 1995.

In the three months to July, unemployment increased by 210,000 to 2.47 million, which takes the jobless rate to 7.9 percent, the Office for National Statistics have said.

In August, claims for benefits grew by 24,400 from July to 1.61 million. This is the highest it has been since May 1997. The statistics also show that one in five people aged between 16 and 24 are now looking for work, which is the highest on record. The number of jobless in this age group rose from 928,000 to 947,000 - edging closer to the landmark of one million and adding to fears of a new "lost generation" of young people.

Martina Milburn, chief executive of the Prince's Trust, the youth charity, said: "We must act now to stop young people falling out of the system. Only by doing so can we stop the unemployed becoming the unemployable."

Work and Pensions Secretary, Yvette Cooper, said the government was targeting investment to help young people find jobs.

"Young people are always more heavily affected by recession because, it's the easiest thing for employers to do, to put back recruitment for a year," she told BBC radio.

"That's why you've got to help young people get that first step on the ladder and that's why a lot of our extra investment is all in getting those young people into those first jobs, that first bit of training or work experience, to get them started."

Shadow work and pensions secretary Theresa May said that the levels of youth unemployment were "disturbing", and that there was an urgent need to "tackle this culture of worklessness."

Of late, there has been signs of the UK economy starting to pick up, yet jobless data tends to lag behind other measures. Earlier this week, the governor of the Bank of England,Mervyn King, said there were signs that the UK economy was growing again.

But he added that the "strength and sustainability" of the recovery were still "highly uncertain", saying the state of the banking system, levels of debt, and the global economy were all drags on growth.

Employment minister Jim Knight said that an OECD Employment Outlook - which recognised UK government effort to help the unemployed - suggested the UK had lower than average rates of unemployment than the G7 and the EU.

"However, we know things will still be tough for some time and unemployment is likely to keep increasing, even once the economy starts growing again - that's why it's critical that we continue investing in people's future and don't just abandon them."

Average earnings, including bonuses, increased by 1.7 percent in the three months to July, which is down from the previous month.

"Unemployment is a lagging indicator and the sharp overall economic contraction suffered between the second quarter of 2008 and the second quarter of 2009 will continue to weigh down on the labour market for an extended period," economist, Howard Archer, of IHS Global Insight said.

16/09/2009

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