RTTNews - U.K. claimant count in June recorded its smallest monthly increase since May 2008, official data showed Wednesday.
The claimant count, which measures the number of people claiming job seeker's allowance, rose 23,800 month-on-month to 1.56 million in June, data released by the Office for National Statistics showed Wednesday. Economists had expected an increase of 41,200.
Compared to the previous year, there was an increase of 716,800. The claimant count total was the highest since June 1997.
These figures make grim reading and confirm our assessment that although the recession is easing, unemployment is set to continue rising at a rapid pace, David Kern, Chief Economist at the British Chambers of Commerce said. On the basis of these numbers, the business lobby is reaffirming its forecast that unemployment will peak at around 3.2 million next year, Kern added.
Commerzbank analyst Peter Dixon said, We do not expect much of turnaround in the labor market for some time to come. He noted that the level of unemployment is likely to peak only in mid-2010 and there will not be any meaningful reduction until 2011.
The internationally comparable ILO measure showed an increase of 281,000 in the number of unemployed during the three months to May to 2.38 million. This is the largest quarterly increase in the number of unemployed since comparable records began in 1971.
The ILO unemployment rate was 7.6%, up from 7.2% in the previous quarter, the largest quarterly increase in the unemployment rate since 1981. Dixon said this increase suggests that the level of unemployment is still rising quite quickly.
Meanwhile, the BCC economist noted that the serious labor market situation highlights the need for persevering with a forceful policy stimulus and the monetary policy committee must increase quantitative easing well above the current level of GBP 125 billion.
Last week, the Bank of England decided to continue with its asset purchase scheme totaling GBP 125 billion, though the central bank was widely expected to increase the size of the scheme by another GBP 25 billion to the authorized GBP 150 billion.
The employment rate for people of working age was 72.9% for the three months to May, down 0.9 percentage points from the three months to February, the largest quarterly fall in since comparable records began in 1971. The total number of people in employment during the same period was just under 29 million, down 269,000 over the quarter.
Average earnings including bonuses increased 2.3% in the three months to May compared with the previous year. Excluding bonuses, average earnings increased 2.6% during the same period. This is the lowest annual growth rate for earnings excluding bonuses since comparable records began in 2001, the statistical office said.
The redundancies level for the three months to May was 301,000, up 31,000 over the quarter and up 182,000 over the year.
Moreover, there were 429,000 job vacancies in the three months to June, the lowest figure since comparable records began in 2001 and it is down 35,000 over the previous quarter.
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