Unemployment hits 17-year high

Unemployment in the UK rose by 128,000 in the three months to October, reaching 2.6 million, numbers from the Office for National Statistics show. This is the guest number of unemployed people since 1994. 

There are signs that the private sector is struggling to pick up the pieces, as Cameron and co would have hoped. Between June and September, private businesses struggled to create just 5,000 new jobs. 

Of the 128,000 newly unemployed people, public sector job losses accounted for 67,000.

“The labour market is on a dangerous trajectory, as today’s numbers confirm that our private sector recovery has stalled,” says Andrew Sissons of The Work Foundation. 

“Businesses are suffering from an acute lack of confidence, which makes it very hard for them to create jobs. The Eurozone crisis also makes it impossible for companies to plan for the long-term, while consumers at home appear to be cutting back their spending.”

More worryingly, it seems likely that unemployment could remain high for several years. The OBR forecasts that unemployment will not start to fall significantly until 2014.

“The fact is that most companies are still too cautious to hire,” adds Daniel Callaghan, director of consulting marketplace MBAandCo.com. “Should their fortunes take a turn for the worse in this fragile economy, excessive spending on wage bills could prove fatal. 

“This is a disappointing end to 2011 and a shot across the bow for the Government going into 2012 – worse news could lie ahead.”

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