Unemployment figures hit 2.5 million

Unemployment in the UK rose to 2.5 million in the three months to the end of November, according to figures released by the Office for National Statistics.

The worst affected appear to be 16-24 year olds, a fifth of whom are out of work - the highest figure since comparable records began in 1992 - totalling almost one million young people.

Also at a peak since 1992 were the numbers of people working part-time because they could not find a full-time job, up by 26,000 this quarter to a total of 1.16 million.

Despite this, data from the ONS showed that the number of people claiming Jobseeker's Allowance in December fell by 4,100 to 1.46 million, and average earnings have risen in by 2.1% in the three months to the end of November compared with 2009.

Prime Minister David Cameron said the figures were "very disappointing" during Prime Minister's Questions on Wednesday, while Labour leader Ed Miliband accused him of "complacency".

The figures came on the day demonstrated against the planned abolition of the Education Maintenance Allowance (EMA).

Brendan Barber, general secretary of the TUC said: "By abolishing EMA, pricing young people out of university and cutting support to get them back into work, the government is punishing youngsters for a mess they didn't cause.

"Employment is now falling at its fastest rate since the recession and many of those finding work are settling for insecure temporary work.

"With the worst of the cuts still to come, this government risks making high joblessness a permanent feature of our economy. It must change course before it's too late."

Forecasters are also downbeat about the future, with David Kern, chief economist at the British Chambers of Commerce warning that private-sector employment could decline over the next year, with unemployment rising to 2.6 million.

Small business views

Meanwhile, some 12.4% of small businesses are expected to decrease staff numbers in the coming months, putting more people out of work, according to the Voice of Small Business index from the Federation of Small Businesses (FSB).

John Walker, chairman of the FSB said: "A number of pressures on small businesses are beginning to come to a head, such as the increase in VAT and fuel duty, placing more strain on cash-flow.

"This, combined with the severe weather at the end of 2010 has meant that small firms are not as confident about their prospects in 2011.

"With inflation above target and the labour market still weak, small firms cannot rely solely on the consumer for growth in 2011.

"So it is imperative that the Bank of England base rate is kept at 0.5%, as once the impact of the VAT rise is excluded, inflation is relatively low.

Kern echoed Mr Walker's sentiments on inflation, saying: "These figures suggest that a premature increase in rates may add to the unemployment total.

"On its part, the Government must ensure that the labour market remains as flexible as possible."

IMAGE Martin Rickett/PA Wire

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