Unemployment hits 17-year high as private sector remains stagnant

Unions and youth campaign groups will warn that 16- to 24-year-olds are bearing the brunt of the UK's jobs 'crisis'. (PA)

A growing number of redundancies in the public sector has driven the unemployment rate to a 17-year high, according to the latest jobs report from the Office for National Statistics.

The overall jobless figure hit 2.64m, up 128,000 since August. Around 8.3 per cent of the UK work force is now unemployed, up from 7.9 per cent in the previous quarter.

Over the same period, 67,000 jobs were cut in the public sector, mainly in local government, as a result of the Government's austerity drive. The number of people employed by the public sector is now 5.99 million, the lowest level since 1994. Union leaders called the figures "shocking" and pressed the Government to take urgent action.

Answering questions in the Commons yesterday, the Prime Minister David Cameron said all job losses were "bad news" and a "tragedy for those involved", but he denied that his policies were "betraying a whole generation of young people".

"The reason that unemployment is going up is because we are losing jobs in the public sector and we are not making them fast enough in the private sector," he added.

Labour leader Ed Miliband said: "He cannot deny that the central economic claim that he made, that the private sector would fill the gap left by the public sector, has not been met. He has broken his promise."

The figures also revealed that the number of people claiming Jobseekers' Allowance rose by 3,000 to 1.6 million over the last quarter. Youth unemployment also continued to rise. The numbers of 16 to 24-year-olds out of work increased by 54,000 over the quarter to hit 1.3 million. Some 22 per cent of young people are now out of work, although the ONS pointed out that 297,000 are actually in full-time education and looking for part-time work.

Levels of long-term unemployment are also increasing. Those out of work for 12 months or more rose to 868,000 from 849,000 three months earlier. The number of job vacancies continued to decline, registering a decline of 8,000 to 455,000. Meanwhile, pay growth is slowing. Total pay increased by 2 per cent compared with a year earlier, down from 2.3 per cent in the three months to September.

The TUC general secretary Brendan Barber said: "No amount of spin can put a gloss on these terrible figures. Worryingly, the latest rise in job losses looks less like a bad blip and more like a trend of entrenched high unemployment."