The number of people claiming job seekers' allowance in the U.K. posted a bigger-than-expected increase in February, while the unemployment rate among youth for the three months through January climbed to its highest level on record. The overall jobless rate stood unchanged at its highest level since 1995.
Data from the Office for National Statistics showed Wednesday that the claimant count rose by 7,200 compared with economists' expectation for an increase of 5,000.
The number persons seeking the jobless allowance rose to 1.612 million, the highest since November 2009, from 1.605 million in the previous month.
The unemployment rate among youth in the age group of 16 to 24 years jumped to a record 22.5 percent during the November-January period. The number of young unemployed increased by 16,000 over the quarter to 1.04 million.
The very serious concern is that many of these youths will be out of work for an extended period given the persistently weak economy and muted growth outlook, IHS Global Insight Chief UK Economist Howard Archer said.
"This is fueling talk of a lost generation of workers and it puts pressure on the Chancellor to come up with more measures to help young people to get a job."
The overall unemployment rate for the three months through January held steady at 8.4 percent, the highest in 16 years. This matched economists' forecast.
There were 2.67 million unemployed people in the U.K. during the period, up 28,000 on the quarter. This, however, was the smallest quarterly increase in unemployment since the three months to May 2011.
The claimant count rate was 5 percent, unchanged from the previous month, but up 0.5 percentage points from a year earlier. This was in line with expectations.
Meanwhile, pay growth weakened sharply during the quarter ended January. During the three months to January, average total pay, including bonuses, rose 1.4 percent annually, marking the weakest gain since May-July 2010. This compares to 1.9 percent growth forecast by economists and that recorded in the December quarter.
It was 0.5 percent less than in the December quarter. Regular pay, excluding bonuses, increased 1.7 percent year-on-year, weaker than 2 percent rise in the previous period. Regular pay was down 0.3 percent from the previous quarter.
The employment rate for the three months to January was unchanged at 70.3 percent. The number of people in employment increased by 9,000 on the quarter, but fell 44,000 annually to 29.12 million.
A survey by the employment services firm Manpower showed yesterday that the U.K. may return to job creation in the next quarter after a bleak midwinter as employers are now more positive about hiring than this quarter.
The U.K. economy contracted 0.2 percent quarter-on-quarter in the fourth quarter. In the latest quarterly Inflation Report, Bank of England policymakers said the recovery path will be slow and uncertain amid substantial headwinds.
by RTT Staff Writer
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