Unemployment rises to 8.4 per cent

New figures released today show that youth unemployment has also risen again: the number of unemployed 16 to 24-year-olds increased by 52,000 in three months to 1.04 million, or 22.3 per cent of that age group.

The number of jobseeker’s allowance claimants in December increased by 1,200 to 1.6 million – the 10th consecutive monthly rise and the highest for a year, but less than experts expected.

The unemployment rate has risen the most in the north east over the past year, where the jobless rate is currently 12 per cent.

Other figures showed that almost a million working days were lost in November as a result of the public sector pensions strike, the highest number of days lost because of a strike since 1989.

Figures released next Wednesday will prove if the economy grew in the last three months of 2011. If not, this could mark the beginning of a new recession.

Read more from Economics Editor Faisal Islam: To prevent unemployment above 10 per cent, Britain will have to buck history

Over 50s and under 24s

Unemployment among 16 to 24 year olds increased by 4.9 per cent in the three months to November, compared with the previous three months.

The rise in unemployment in the over 50s, as well as among young people, is a “worrying trend”, Charles Levy, senior economist at The Work Foundation told Channel 4 News.

“Older people are being made redundant and then not being able to re-enter the labour market,” he said. “Young people and old people are finding it very difficult and are bearing the brunt of the unemployment rise.”

John Salt, director at recruitment firm totaljobs.com, said that the situation is “dire” for the unemployed.

“Today’s figures merely confirm what our barometer has been telling us for three months now, that applications per job are at an all-time high of 23, with not enough growth in the labour market to absorb the numbers being laid off. What’s more, the signs for 2012 just aren’t good.”

Slight rise in employment

Figures released on Wednesday by the Office for National Statistics show that the number of people in employment actually increased by 18,000. While the number of people in full-time employment fell by 57,000 over the quarter period, there was a 75,000 increase in the number of part-time workers.

However because the number of people classed as economically inactive fell by 61,000, the overall employment figures increased.

Notwithstanding the gravity of the situation, over half of the headline rise in unemployment over the last quarter represents people who were previously economically inactive switching to actively look for work. Neil Bentley, CBI

Dr Neil Bentley, deputy director-general of the business organisation CBI, said the situation was of major concern: “Notwithstanding the gravity of the situation, over half of the headline rise in unemployment over the last quarter represents people who were previously economically inactive switching to actively look for work,” he said.

The decrease in the number of people classed as economically inactive is partly as a result of fewer retired people under the age of 65. But experts say it may also be because more parents or couples who traditionally relied on one income, are now looking for work, as the main earner may now be reliant on part-time or less secure employment.

“Those in work are also continuing to feel the squeeze as the economy substituted full-time work for part-time, permanent employment for temporary positions, and employee jobs for often more precarious self-employment,” Mr Levy told Channel 4 News.

Regional variation

The north east is the only region where unemployment reaches the top band of 11.6 to 14.5 per cent.

In Scotland, the number of unemployed rose by 19,000 to 231,000, meaning that 8.6 per cent of the population are out of work.

Unemployment fell by 1,000 in Wales to 130,000, resulting in a rate of 8.9 per cent, and in Northern Ireland, where unemployment now stands at 6.8 per cent, down 7,000.

The levels of unemployment have not quite reached the peak levels of 1992, when Northern Ireland, London, the north east and West Midlands had unemployment rates of 11.6 to 14.5 per cent.

During this year, the majority of the UK had unemployment rates of 8.7 to 11.5 per cent, compared to just five regions this year.