Jobless total rises by 38,000
Updated on 11 June 2008
Job losses in the financial services and manufacturing sectors have helped fuel the biggest rise in unemployment in nearly two years.
The number of unemployed people in the UK jumped 38,000 to 1.64 million between February and April. It is the biggest quarterly jump since July 2006, and edged up the country's unemployment rate for the first time since May 2006 - by 0.1% to 5.3%.
Although unemployment data is not broken down by job sector, data from the Office for National Statistics showed that the manufacturing and financial services industries have shed by far the most jobs so far this year - 11,000 and 20,000 respectively during the first quarter.
Tens of thousands of redundancies have been forecast in the City as banks and other lenders rein in their activity due to the credit crunch.
In a sign of wider job market pressure amid the economic slowdown, the number of people claiming Jobseeker's Allowance also rose for the fourth month in a row, rising by 9,000 last month to 819,300. It is the biggest monthly increase since April 2006.
But there was some good news from the jobs data for the Bank of England in the shape of overall wages growth, which fell 0.2 percentage points to 3.8% during the year to April. That could help dampen the upward pressure on inflation, which is currently running well above target at 3%.
Economists warned, however, that slowing economic growth and plummeting business confidence meant the employment outlook remained bleak. Howard Archer from Global Insight said: "The labour market is now clearly softening appreciably as markedly weaker growth and deteriorating business confidence impact."
The number of people in work increased by 76,000 in the three months to March to 29.55 million, a record high and reflecting an increase in the working age population.
But the rate of increase in the employment level has slowed over recent months, with the recent 76,000 rise comparing to an extra 117,000 during the quarter to February and 152,000 immediately preceding.
TUC general secretary Brendan Barber said: "This rise in unemployment will inevitably cause concern at a time when there is not much economic cheer about - but record numbers in work show that the UK labour market is still comparatively healthy. The priority for economic policy makers is to make sure that ordinary people at work and home-owners do not end up paying the price for excessive risk-taking and poor regulation in the banking sector."
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