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Unemployment rises fastest in over two years

Disappointing employment data adds to pressure on government

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The number of Britons claiming jobless benefits grew by around 37,100 during July, official data showed on Wednesday.

The disappointing numbers, released by the Office for National Statistics, add to the pressure on chancellor George Osborne and the coalition government, as well as offering more evidence of the parlous state of the UK’s economic recovery.

A wider measure of joblessness based on International Labour Organisation methods suggests unemployment among Britons rose by 38,000 to 2.494 million during the three months to June. In the same period only 25,000 people started new jobs as hiring plans are scaled back at companies across the country.

Rising unemployment is also likely to further dent shaky consumer morale, already hit by high inflation, low wage rises and recent riots in major UK cities.

“These are disappointing figures but we always said that the road to recovery would be choppy,” said employment minister Chris Grayling. “Clearly this has been a difficult few months with a range of one-off factors and a slowdown in the world economy having an impact on the UK.”

However Neil Owen of recruitment consultancy Robert Half UK said there are still sectors and regions of the country where hiring continues and demand for new staff is strong.

“We are hearing from some companies that they lack the talent they need to address emerging business opportunities,” he said. “Financial and business services as well as the natural resources sector are areas where demand outweighs supply for top talent.”

Average weekly earnings growth including bonuses rose 2.6 percent in the three months to June compared to last year, a faster rate than the 2.3 percent analysts had forecast. Excluding bonuses, however, pay only increased by 2.2 percent.

Wage increases remain well below inflation, which is running above 4 percent, providing little relief for households’ squeezed budgets.



Unemployment rises fastest in over two years
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