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16 February 2011

UK unemployment rises to 2.49 million

Youth unemployment hits record high, with more than one in five young people out of work.

By Samira Shackle


Unemployment has risen by 44,000 in the three months to December to 2.49 million, official figures show. This brings the unemployment rate to 7.9 per cent.

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Youth unemployment is at its highest since 1992 (when comparable records began), with more than one in five 16-to-24-year-olds now out of work, after a rise of 66,000 to 965,000 without jobs. The figure now looks certain to rise to one million.

Our economics editor, David Blanchflower, has written extensively on the subject of youth unemployment, and notes that “the increase in youth unemployment since May 2010 is entirely among those who are not in full-time education”. He also explained, last week, that the government’s claim that youth unemployment was inherited from Labour is disingenuous:

The explanation for the rise in youth unemployment over that period [2003-2008] appears to be that it was driven by the force of numbers. The growing size of the youth cohort meant that there were more youngsters chasing a pool of jobs that was not increasing fast enough . . .

From 2008 onwards, the size of the cohort remains pretty steady and even starts to fall as youth unemployment explodes. The story for the later period is that there is simply a lack of demand.

The number of people claiming Jobseeker’s Allowance (the claimant count) also increased by 2,400 between December 2010 and January 2011, reaching 1.46 million.

While the employment minister, Chris Grayling, attempted to put a positive spin on developments, saying that the rise in vacancies was “particularly encouraging”, the fact is that these figures are weaker than the government had predicted – and are certain to rise further as public-sector cuts come into force.