U.K. Jobless Claims Highest Since July 1997

The claimant count was 1.54 million in May, up 39,300 over the previous month, the Office for National Statistics said. Meanwhile, economists had forecast an increase of 60,000. The claimant count rate rose to 4.8% from a revised 4.6% in April.

Commerzbank analyst Peter Dixon said the rise in May unemployment was relatively moderate by the standards of recent months.

The number of unemployed people increased to 2.26 million during the three months to April, an increase of 232,000 over the previous quarter. The unemployed total is the highest since the end of 1996. Meanwhile, the jobless rate was 7.2%, up from 6.5% recorded during the period November to January.

Trade Union Congress General Secretary Brendan Barber said, Unemployment is now at its highest level since Autumn 1996 and it will take years, not months, to recover. If we are to avoid the 10% unemployment rates of the 1980s and 1990s it is imperative the Government continues to invest in tackling unemployment.

On the other hand, the employment rate for people of working age was 73.3%. The total number of people in employment for the three months to April was 29.11 million, down 271,000 over the quarter. This is the largest quarterly fall in the number of people in employment since comparable records began in 1971.

It is much too early to talk about the end of recession and it is important not to withdraw the policy stimulus before there is firmer evidence that the economy has stabilized, Chief Economist at the British Chambers of Commerce, David Kern said. The government should consider easing harmful labor market regulations that are adding pressure on businesses.

Average earnings including bonuses increased 0.8% in the three months to April, compared with the previous year. Excluding bonuses, earnings rose 2.7%. According to the ONS, this is the lowest annual growth rate for earnings excluding bonuses since comparable records began in 2001.

The redundancies level for the three months to April was 302,000, up 36,000 over the previous quarter and marked the highest figure since comparable records began in 1995.

Job vacancies dropped 38,000 to 444,000 job vacancies in the three months to May, the lowest figure since comparable records began in 2001. According to the statistical agency, most sectors have shown declines in vacancies over the quarter, with the largest fall occurring in finance and business services.

Official data revealed today that the number of people in public sector employment rose 15,000 to 6.02 million in March 2009 from December 2008. meanwhile, the number private sector employees were 23.09 million, down 286,000 from December 2008. On Tuesday, the Chartered Institute of Personnel and Development or CIPD warned that the public sector in the U.K. could lose as many as 35,000 jobs over the next five years.

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