12 October 2005

Unemployment falls, but claimant count rises

The number of unemployed people in the UK fell by 7,000 to 1.4 million between June and August, the latest figures from the Office of National Statistics have revealed.

However, the figures also showed that the number of people out of work and claiming benefits in the three months to August, increased by 8,200 to 875,500 – more than double the number analysts had predicted.

The rate of unemployment remained unchanged at 4.7%. However, the number of job vacancies also fell by 15,800 from the previous quarter to 625,100.

The manufacturing industry continued to be hit by jobs losses, with a drop of 99,000 in the three months to August to a record low of 3.18 million, compared with last year.

Average earnings also remained unchanged from the previous month at 4.2%.

Margaret Hodge, Minister for Employment and Welfare Reform said that the rise in the number of people claiming Jobseekers Allowance was due to people staying on benefits longer and stressed that the number of new claims had fallen. Ms Hodge said that she was investigating why this was happening, to see what could be done to reverse the trend.

However, Liberal Democrats Treasury spokesperson Vince Cable described the figures as "very disturbing". He said: "Growing levels of unemployment are likely to have a knock-on effect on consumer spending and the housing market.

"The UK economy is now growing well below the Chancellor's predictions and his continuing complacency is distressing.

"Today's figures continue the longest period of increasing unemployment in the last 12 years."

(KMcA/SP)