UK unemployment surges

By Louisa Peacock, Jobs Editor

The rate of unemployment rose to 8pc, higher than forecast and 0.1pc up on the previous quarter. More than one in five young people were trapped in unemployment, with a youth jobless rate of 20.6pc, up 0.8pc over the period.

Public sector employment fell by 45,000 in the final quarter of 2010 to 6.2m, even before the full impact of the Government's spending cuts started to take effect.

However, the number of Britons claiming unemployment benefit showed an unexpected, sharp drop in February. The total claiming Jobseeker's Allowance fell by 10,200 last month to 1.45m, the biggest reduction since last June.

The number of people classed as economically inactive increased - up by 43,000 to 9.33m, including 2.3m looking after a family.

Samantha O'Byrne, head of resourcing at Grant Thornton, said: “Today’s further rise in unemployment by 0.1pc is a clear signal to the Chancellor, one week before he is due to deliver his Budget, that serious measures need to be taken to curb the unemployment rate.

“The shrinking economy over the last quarter will have had an impact on the already unsteady employment market and the Government is facing a mammoth task in returning UK plc to growth. Speeding up job creation is the only real solution to the problems the country is facing as unemployment has now reached its highest rate since 1994."

Employment Minister Chris Grayling said: "There is good news and bad news in these figures. There's been a welcome drop in the number of people on benefits, and the increase in full-time private sector jobs is a step in the right direction.

"But the rise in overall unemployment is a real concern and underlines the need to press ahead with policies which will further stimulate growth in the private sector.

"For those on benefits that are now looking to make the transition into the workplace our new Work Programme will provide tailored support to get them into jobs."

The Government's flagship new Work Programme will be in place by the summer and will offer personalised, tailored support to get people back into jobs.

Other data revealed that the number of over-65s in work increased by 56,000 in the latest quarter to reach 900,000, the highest since records began in 1992.

There was also a record number of 50 to 64-year-olds in work - up by 25,000 to 7.3m.

Average earnings increased by 2.3pc in the year to January, up by 0.5pc on the previous month, mainly driven by bonus payments in the finance and business services sector.

There were almost half a million job vacancies in the three months to February, up by 24,000 over the previous quarter, although that figure included 29,000 temporary jobs for this year's census.

The TUC branded the latest unemployment figures "shocking".

Brendan Barber, general secretary of the TUC, said: "These figures show that the jobs recovery is still some way off. Public sector employment has already fallen 39,000 between September and the end of last year, and with thousands more redundancies still to come – for example in local authorities – this is no time to be cutting back on support programmes for the unemployed.

“This Government’s economic policies risk making high joblessness a permanent feature of our economy. It must change course before it’s too late.” Telegraph