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UK unemployment total increases to 2.5m UK unemployment total increases to 2.5m
(40 minutes later)
Unemployment in the UK increased by 35,000 in the three months to October to 2.5 million, the Office for National Statistics (ONS) has said.Unemployment in the UK increased by 35,000 in the three months to October to 2.5 million, the Office for National Statistics (ONS) has said.
It was first time that the jobless measure has risen for six months. It is the first time that the jobless measure has risen for six months.
The increase pushed the unemployment rate up to 7.9%, a higher rate than analysts had expected. The increase pushed the unemployment rate up to 7.9%, higher than analysts had expected.
However, the number of people claiming the Jobseeker's Allowance in November fell fractionally, by 1,200 to 1.46 million, the ONS said. However, the number of people claiming the jobseeker's allowance in November fell fractionally, by 1,200 to 1.46 million, the ONS said.
The pound dropped half a cent on the news, to $1.573. Across the UK, among the worst-hit areas were Yorkshire, the North East and Northern Ireland, all of which already suffer unemployment rates over 9%.
The Midlands saw the biggest jump in unemployment, up by 0.5 percentage points in the West Midlands and 0.8 in the East, to 8.9% and 8.2% respectively.
London and Scotland saw their unemployment rates fall slightly, while the South West remains the UK's jobs outperformer, seeing its unemployment rate fall 0.3 percentage points to just 5.7%, the lowest in the UK.
Disappointment
Analysts had expected total unemployment to fall.
The pound dropped over half a cent on the news, to $1.569.
The data could also heighten the policy dilemma for the Bank of England, coming only a day after figures showed consumer price inflation had risen to 3.3%, well above the Bank's 2% target.The data could also heighten the policy dilemma for the Bank of England, coming only a day after figures showed consumer price inflation had risen to 3.3%, well above the Bank's 2% target.
In recent meetings, the UK Bank's monetary policy committee has been split three ways, with one member voting in favour of gradual interest rate rises to head off inflation, while another has voted to increase the Bank's purchases of government bonds in order to boost the recovery. In recent meetings, the Bank's monetary policy committee has been split three ways, with one member voting in favour of gradual interest rate rises to head off inflation, while another has voted to increase the Bank's purchases of government bonds in order to boost the recovery.
"I think it's an antidote to some of the inflation concerns yesterday," said Brian Hilliard, economist at Societe Generale. "The employment increases seem to be running out of steam.
"The question is still whether there is sufficient momentum in the economic recovery to generate steady employment gains. I can see that in manufacturing but not in the service sector."
Gender divide
Pay - excluding bonuses - was up 2.2% on a year earlier, some way below the inflation rate, meaning that the purchasing power of wages continued to fall on average.
There was also a 22,000 increase in the number of "inactive" people - those out of work but not seeking work, meaning they are not counted as unemployed - mainly because of an increase in early retirement.
The data suggests that women are doing worse than men. The number of female benefit claimants rose by 4,800, compared with a 6,000 drop in male claimants.
The percentage of women aged 16 to 64 in work dropped 0.2% to 65.5%, while for men the rate was unchanged at 75.8%.
Public vs private
The rise in the number of jobless was entirely driven by the public sector, where employment fell 33,000.
However, the private sector failed to take up the additional slack, with employment there remaining unchanged.
The government is relying on private sector job creation to offset an estimated 330,000 public sector redundancies over the next four years due to government austerity.
But Mr Hiatt describes this view as being out of touch with what is happening on the ground.
"For the UK's businesses and their employees, 2011 is shaping up to be harsher than any of the past three years," said Dominic Hiatt, insolvency practitioner at accountants HW Fisher.
"This time next year we expect unemployment to be considerably higher than it is at present, as many more of Britain's companies go to the wall. We deal with companies of every size and from every sector day in, day out and for a large chunk of them things are looking very bleak indeed."
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