Unemployment in the UK increases
by Kay Murchie
Figures from the Office for National Statistics have revealed that unemployment in the UK increased by 12,000 to 1.62 million in the 3 months to May.
The figures are the worst for 16 years after the amount of people claiming unemployment benefit rose by 15,500 in June to 840,100. Economists believe this could exceed a million by the end of 2009.
In the three months to May, 118,000 people were made redundant, up 10,000 on the 3 months to April.
Redundancies are rife at present after employers are faced with rising energy costs, a slump in the property market and consumer confidence, which is currently at a low level.
The news comes as council workers are on a 48-hour strike in a dispute over pay. There have been warnings of a summer of strikes after the unions threatened further action if their 2.45% pay rise offer is not improved.
Last week, housebuilders including Persimmon, Barratt’s, Bovis and Redrow all announced job losses due to the housing slowdown while Wolseley, the world’s largest distributor of plumbing materials, announced further job losses as a result of the property slump.
JCB, one of the largest construction equipment manufacturers in the world, has announced 650 job losses this week. The company said it has experienced a severe fall in demand for its products.
Job losses have also been announced at HBOS, Britain’s biggest mortgage lender, while Co-op’s takeover of Somerfield is expected to result in job losses.
The Bank of England continues to battle with inflation after figures this week revealed the growing costs of food and fuel has driven inflation up to 3.8% in June, which is nearly double the 2% target.
The rising unemployment figures will undoubtedly be a concern for homeowners, who are already struggling with rising mortgage payments, higher food costs and rising utility bills.
James Knightley, an analyst at ING, said the outlook for consumer spending remains grim as wages are not increasing in line with the cost of living.
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