Unemployment Up In Three Months To January

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Unemployment increased between November (Xetra: A0Z24E - news) and January to 2.52 million, up 7,000 on the previous three months.

The Office for National Statistics (ONS) said that the number of people claiming Jobseeker's Allowance last month fell by 1,500 to 1.54 million.

The highest unemployment rate was in the North East at 9.8%. The lowest areas were in the east of England and South East (HKSE: 0726.HK - news) at 6.6%, with London's jobless rate at 8.5%.

The ONS also revealed that average earnings for those in employment increased by 1.2% in the year to January.

Unemployment has increased for the first time in a year, delivering a pre-Budget blow to the Government and Chancellor George Osborne.

The jobless jump ending a run of reductions, with the increase caused by more 18 to 24-year-olds becoming unemployed.

The total is still 152,000 lower than a year ago, while the number of people claiming jobseeker's allowance fell in February by 1,500 to 1.54 million, the fourth consecutive monthly reduction.

There were 993,000 jobless 16 to 24-year-olds in the latest quarter to January, up by 48,000 from the three months to October, but the rise among 18 to 24-year-olds was 53,000.

The number of unemployed women increased by 5,000, the latest data from the Office for National Statistics showed.

Employment Minister Mark Hoban said: "It's a credit to businesses that the private sector is employing one and a quarter million more people than when this Government took office, helping us compete in the global race.

"Today's figures show that, against a difficult economic backdrop, we're helping people to move off benefits and into work.

"There are still tough challenges ahead which is why we're working hard to give jobseekers all the help and support they need to realise their aspiration of finding a job."

Other figures revealed that public sector employment fell for the 13th consecutive quarter, by 20,000 to 5.7 million, the lowest for over a decade.

Local government employment fell by 32,000 and civil service jobs by 4,000, but the figure increased by 11,000 in central government.

Dave Prentis, general secretary of the Unison (KOSDAQ: 018000.KQ - news) union, said: "This time five years ago there were one million fewer unemployed people in the UK. The Government has failed every single one of these people - and it has failed our country.

"Every redundancy is a personal tragedy and brings with it hardship for the whole family, and the story behind each job lost in the public sector is one of libraries closing, day care centres shutting, fewer nurses on the wards or young people losing vital careers advice and help.

Employment in private companies increased by 151,000 to 24 million.

The number of people out of work for between six and 12 months increased by 5,000 to 447,000, but fell by 16,000 for those unemployed for over a year to 887,000.

There were 29.7 million people in work, up by 590,000 on a year ago.

There were 8.9 million people classed as economically inactive, including those looking after a relative or who had given up looking for a job, a fall of 118,000.

Total (NYSE: TOT - news) pay rose by 1.2% in the year to January, down by 0.1% on the previous month and less than half the rate of inflation.

Meanwhile, Bank of England governor Sir Mervyn King failed to garner more support for further economy-boosting measures earlier this month amid fears over the impact on the pound.

Minutes of the March Monetary Policy Committee (MPC (KOSDAQ: 050540.KQ - news) ) meeting showed Sir Mervyn and fellow rate-setters David Miles and Paul Fisher repeated calls for another £25bn in quantitative easing (QE) as recent economic data indicated there was a 50% chance of a triple-dip recession.

But they were outvoted as fears of an "unwarranted depreciation of sterling" prevented policymakers from firing up the printing presses on more QE.

The majority of the nine-strong MPC felt that increasing QE - currently at £375bn - could further weaken the pound as it risked being "misinterpreted as a lack of commitment to maintaining low inflation", according to the minutes.

There were also doubts over the benefits of more QE at a time when the economy needs to rebalance away from consumer spending towards investment and trade.