U.K. unemployment rate grows at its fastest rate since 1992

U.K. unemployment rate grows at its fastest rate since 1992

	Published : Thu, 16 Mar 2006 10:15 By : Andrew Stead Print this Story

LONDON: Unemployment grew at its fastest rate in February since the 1992 recession, according to figures released by the Office for National Statistics.

The number of unemployed and claiming benefits increased by 14,600 to 919,700, the biggest increase since December 1992, the ONS said. It also said more than 100,000 jobs have been lost in 2005 but the unemployment rate remained at just 2.9 per cent.

The government's survey-based measure drawn for the labour force survey, however, showed a rise of 37,000 to 1.53 million over the three months to January.

The ONS said the increase happened mostly among women.

Total employment fell for a third month in January, the first time it has done so since October to December 2000. The fall of 7,000 was relatively modest compared with a total workforce of 28.8 million.

Average earnings during the three months to January were 3.5 per cent higher than a year earlier and unchanged from the downwardly revised headline figure for December. In January, earnings were 3 per cent higher than a year earlier, but the weakest increase since April 2003.

The retarded earnings growth is attributable to lower bonuses in the financial sector, said ONS.

Growth in salaries in the public sector slowed to 4.1 per cent from 4.7 per cent while the private sector eased to 2.8 from 3.9 per cent after a drop in private sector services to 2.3 per cent from 3.6 per cent.

Analysts pointed out that some of the data in the ONS study are positive -- average number of hours worked increased, redundancies were flat and reading on vacancies was firm.

The ONS released the details even as Lloyds TSB announced plans to close some of its offices, which may cut some 500 jobs, BA said it may close down 17 travel shops affecting 300 jobs and Boots said it expected some 2,250 jobs to become redundant with its plan for an automated central warehouse.

There were calls on the Bank of England to review its policy on interest rates. Brendan Barber, general secretary of the Trades Union Congress, told the central bank to reduce the rates in order to encourage greater investment and help people back to work.

Employment minister Margaret Hodge admitted there is an increase in the number of benefit claimants, but felt the underlying fundamentals of the labour market remained robust. She said another reason could be students taking longer to get a job after they graduate or complete training. There are also instances of more number of people, previously classified as economically inactive, coming into the job market.

Eurostat, the European Union's statistical arm, came out with figures showing unemployment rates in January were 9.1 per cent in Germany, 9.2 per cent in France, 8.4 per cent in Spain and, in the third quarter of last year, 7.5 per cent in Italy.