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Europe

UK unemployment falls dramatically

Jobless rate decreases by biggest quarterly amount in a decade, but many households remain under financial pressure.
Last Modified: 12 Dec 2012 16:17

Britain's unemployment rate has shrunk by the biggest quarterly amount in more than a decade, with a record number of people working, official data showed.

The number of unemployed people fell by 82,000 to 2.51 million in three months through to October - the lowest since March to May 2011 - the Office for National Statistics (ONS) said. The jobless rate stayed at 7.8 per cent, in line with forecasts.

The ONS also revealed that the number of people in work has struck a new record high, jumping by 40,000 to 29.6 million people over the same period.

Despite the upbeat figures, British Prime Minister David Cameron cautioned that long-term unemployment remained "stubbornly high".

"Obviously, there is no room for complacency - there are still far too many people who are long-term unemployed," Cameron told parliament in his weekly question-and-answer session.

"But in these figures we can see 40,000 more people in work, vacancies are up, unemployment is down by 82,000 and the claimant count is down."

The numbers claiming jobless benefits slid 3,000 in November to 1.58 million people, compared with October.

ING economist James Knightley said: "The UK jobs report shows some reasonably encouraging newsflow on the labour market.

"The fact that UK unemployment is rising, consumer confidence is up and anecdotal evidence of retail sales have not been too bad, offers some hope that the domestic situation in the UK is stabilising."

Continued austerity

The latest ONS data also showed that many Britons still faced a squeeze on their finances.

Average weekly earnings including bonuses grew by 1.8 per cent in the three months through to October. Analysts had forecast a rise of 1.9 per cent. Excluding bonuses, pay increased by 1.7 per cent.

Both figures were below inflation, which jumped to 2.7 per cent in October.

"Such a picture is not supportive for the spending profile int he coming months as households remain under pressure in the current uncertain environment, even if labour markets remain resilient," said Annalisa Piazza at Newedge Strategy.

Presenting a half-yearly budget statement to parliament last week, Finance Minister George Osborne said Britain will endure more austerity and miss a key debt-cutting goal as the economy looks set to grow far more slowly than previously thought.

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Source:
Al Jazeera and agencies
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