Youth unemployment hits 1 million
• UK unemployment rises to 2.62m, a 17-year high
• Youth unemployment rate at 21.9%
• Claimant count rises to 1.6 million
• Employment minister blames the eurozone
Youth unemployment has broken through the 1 million mark to a record high and the UK’s wider unemployment rate has climbed to a 15-year high.
The government sought to blame the deterioration in the jobs market on pressures from the eurozone debt crisis but came under attack for ignoring problems at home.
Fears that young people are bearing the brunt of Britain’s economic slowdown were underscored by official figures showing there were 1.02 million unemployed 16 to 24-year-olds between July and September. One in five young people are now out of work.
„Today’s ugly labour market data will raise concerns that the UK economic recovery is fading away, and that a long-term impact will be felt among the nation’s youth,“ said Chris Williamson, chief economist at Markit.
The wider national picture was also one of a deteriorating jobs market.
The Office for National Statistics said that there were a total of 2.62 million unemployed people in the quarter, the highest total since 1994. That left the unemployment rate at a bigger-than-expected 8.3%, the highest since 1996. The number of people claiming jobseeker’s allowance last month increased by 5,300 to 1.6 million, the ONS said.
Employment minister Chris Grayling said the eurozone’s troubles were behind the rise. „These figures are bad news. They are I’m afraid the consequence of what we’re seeing in the eurozone,“ he said.
„If you go back four months, unemployment was falling, youth unemplyment was lower than 900,000. We’ve seen a big slowdown in the economy I think as a result of the crisis elsewhere.“
But leading Liberal Democrat peer Matthew Oakeshott hit back that Grayling was overlooking domestic problems. „It’s ridiculous to blame this rise in unemployment on the crisis in the eurozone. All economists know it’s a lagging indicator, so this is the result of what has been happening iun our economy over the past year, for example the collapse in the housebuilding to the lowest peacetime level since 1923,“ he said.
The ONS data on earnings showed the squeeze on households continuing. While inflation stands at 5%, earnings rose at less than half that pace in the three months to September, going up 1.7% on a year earlier.
That bodes ill for the wider economy, analysts said.
„Overall, the rise in unemployment and weakness of earnings growth relative to inflation continue to place substantial pressures on household finances – squeezing real incomes, suppressing confidence and leading to increased precaution among consumers. This can only be bad news for economic growth in the short-term – especially in consumer-dependent sectors such as retail,“ said Scott Corfe, senior economist at the Centre for Economics and Business Research.
Grayling pledged help for young people in particular, with schemes such as the government’s work programme and work experience scheme „which is getting a significant number of young people off benefits and into work“.
But for now, the unemployment rate for 16 to 24-year-olds stands at more than double the rate for the wider population, at 21.9%.
The youth unemployment level and rate were the highest since comparable records began in 1992. But the ONS added that earlier data, calculated on a slightly different basis, indicated that the level of youth unemployment was higher in the mid-1980s. It also noted that the total figure includes 286,000 people in full-time education who were looking for part-time work.