Page last updated at 11:26 GMT, Wednesday, 12 November 2008

Unemployment reaches 11-year high

John Wells on his search for work

The number of people out of work in the UK in the three months to September jumped by 140,000 to 1.82 million - the highest in 11 years.

The unemployment rate rose to 5.8%, up from 5.4% in the previous quarter, according to official figures.

The number of people claiming the Jobseeker's Allowance rose by 36,500 to 980,900 in October - the highest monthly increase since 1992.

Economists say unemployment could top two million within months.

These latest jobs figures came shortly before the Bank of England produced its gloomiest set of forecasts for in more than a decade.

The Bank said Britain's economy had probably already entered recession and was likely to contract further in 2009.

On Tuesday news came of more than 5,000 cuts by firms including Virgin Media, Yell and GlaxoSmithKline.

Policy 'priority'

The annual growth rate of average earnings, including bonuses, eased to 3.3% in the three months to September compared to the previous period.

Excluding bonuses, average earnings grew at 3.6%, unchanged on the previous three months. Inflation is currently 5.2% but is set to plummet as the economy slows.

The UK labour market is about to suffer the consequences of the once-in-a-generation financial crisis
Graeme Leach, Institute of Directors

The number of manufacturing jobs fell to 2.86 million, the lowest figure since records began in 1978.

TUC general secretary Brendan Barber said: "The signs are that redundancies are coming even faster since these figures were collected. Countering unemployment must be public policy priority number one."

ING economist James Knightley said that the last recession in the early 1990s saw 31 consecutive monthly rises in unemployment.

"We are likely to have plenty more bad news on the labour market to come," he warned.

He said the number of those out of work would "push towards 2.5 million in 2010".

Union pleas

Derek Simpson, joint general secretary of the Unite trade union, called for a programme of government intervention.

"Only urgent and widespread action by government to protect jobs and homes will help hard-pressed families through the worst of this global turmoil," he said.

GMB general secretary Paul Kenny said: "The chancellor is right to spend money to keep people in work rather than spend money on unemployment benefit."

Historical unemployment graph

"He needs to keep the pedal to the metal in terms of spending on regeneration," he said.

Graeme Leach, of the Institute of Directors, said unemployment could rise to 2.8 million by 2010.

"The UK labour market is about to suffer the consequences of the once-in-a-generation financial crisis," he said.

Jobless totals

The claimant count - those claiming Jobseeker's Allowance - has now increased for nine months in a row and is 154,800 higher than a year ago.

The number of people in work fell by 99,000 to 29.4 million and vacancies were down by 40,000 to 589,000, according to the Office for National Statistics.

The unemployment rate of 5.8% is the highest since early 2000, while the number of people looking for work has jumped by 182,000 over the past year.

The number of unemployed men was 1.07 million, up 85,000 over the latest quarter, while 55,000 more women joined the ranks of the unemployed, up to 750,000.

Unemployment among 18 to 24-year-olds increased by 53,000 to 579,000, the highest figure since 1995.

Long-term unemployment rose, with the numbers out of work for longer than a year up by 20,000 to 435,000.

There was also increase in redundancies, as 156,000 people reported they had up lost their jobs during the three months to September - up 29,000 from the previous quarter.

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