UK unemployment rises 80,000 in three months

Unemployment has risen sharply, according to the latest figures from the Office for National Statistics. The 80,000 increase in the number of people without jobs in the three months to June was the biggest rise since August 2009, when Britain was still in recession.

Some 2.51 million people are now unemployed, representing 7.9 per cent of the total workforce. Youth unemployment rose by 78,000 to 973,000. Almost a fifth of 16 to 24-year-olds are now out of work. The number of people claiming unemployment benefit rose by 20,400 in August and now stands at 1.58 million. And the numbers working part -time because of a shortage of full-time positions also increased to 1.28 million, the highest level since 1992.

In the first real sign that Government spending cuts are biting, public- sector employment fell by 110,000 over the three months, the largest fall since comparable records began in 1999. Hundreds of thousands more public-sector job cuts are expected as the Government slashes departmental budgets by 11 per cent by 2015.

The Coalition's growth expectations are predicated on public-sector job losses being offset by new jobs created by the private sector. The Office for Budget Responsibility forecast in March that public-sector employment will fall by 400,000 by 2015, but that 1.3 million new private jobs will be created. But this large number of public-sector job losses in just three months and the fact that only 41,000 new private jobs were created over the same period casts doubt on the OBR's forecast.

Nida Ali, an adviser to the Ernst and Young ITEM Club, said: "This is a massive number [of public-sector job losses] for just one quarter and suggests that the OBR may have underestimated the number of job cuts required to achieve the desired level of spending cuts."

Wages are up 2.8 per cent on last year, but this is less than the rate of inflation, meaning workers have, on average, received a real-terms pay cut over the past year.

The Employment Minister, Chris Grayling, yesterday admitted the figures were "unwelcome". He said: "Clearly we must continue to focus our efforts on supporting business growth and ensure that people who do lose their jobs have the best possible support to get back into employment."