Member Article

UK unemployment rate remains unchanged

The UK unemployment rate remains at 7.8%, despite total numbers falling by 4,000 in the three months to June.

According to The Office for National Statistics (ONS), 2.51 million people are now out of work in the UK despite the economy showing signs of growth.

The rate is well above the 7% target rate set by the Bank of England.

The Bank’s governor, Mark Carney, says interest rates are unlikely to rise before that target is reached.

Mr Carney said he expected that 750,000 new jobs would have to be created, taking up to three years, to hit the target.

The number of people claiming Jobseeker’s Allowance in July fell more sharply, down by 29,000 to 1.4 million.

The ONS said the figures meant unemployment was “broadly unchanged” from the first three months of the year.

But youth unemployment, among those aged 16-24, increased by 15,000 to reach 973,000.

However, Will Moy, director of Full Fact, an independent fact-checking organisation, insisted these figures can be distorted, and need to be interpreted differently.

Speaking to BBC Radio 4’s Today programme, he said: “Ed Milliband [Labour leader] was right o say Britain’s youth unemployment is the second worst by numbers in Europe after crisis-hit Spain, but in that list you have Malta, Luxembourg, Cyprus; so the number of unemployed young people in a country depends on how many young people there are in a country.

“If you looked at what proportion of young people are unemployed in Britain, it is just 20%, two-thirds of the way down the European league table for youth unemployment.

Britain, though, suffered the fourth-worst decline in wages among the 27 EU nations during the economic downturn. Hourly wages have fallen 5.5% since mid-2010, compared to 0.7% across the European Union as a whole.

The ONS released figures showing that wages actually grew by 1.1% over the past 12 months however.

The number of people out of work for more than two years also rose by 10,000 to 474,000, the highest number in 16 years.

The number of people in work increased by 69,000 in the three months to June, up to 29.78 million. That is the highest level since records began in 1971.

Flora Lowther, head of research at Adzuna, comments: “The jobs market is building up a real head of steam, which is helping drive the UK’s economic rehabilitation. Wage growth still lags significantly behind inflation, but hiring is picking up, most notably in the manufacturing and construction sectors – which are both vital to the economic recovery.

“Even in the much-maligned manufacturing sector, vacancies are higher than a year ago, while construction vacancies are up 9% suggesting output in these sectors will continue to increase back towards their pre-2008 levels.

“Barring any major shocks, unemployment should continue to fall towards the 7% level earmarked by the Bank of England as the trigger for interest-rate rises.”

This was posted in Bdaily's Members' News section by Graham Vincent .