Unemployment continues to climb
The number of people out of work continues to rise, hitting 1.86 million in the three months to October.
Official statistics show the unemployment rate in the UK hit 6% during the period, up nearly 50 basis points from the previous three months. There are now 1.86 million people out of work in the UK, up 137,000 from the previous quarter and 238,000 from just a year ago.
Meanwhile, the number of vacancies is down 49,000 to just 562,000.
Tony McNulty, minister for employment, admits the figures are “very disappointing” but says the government is doing all it can to support people.
"We have put in place extra help and support that will ensure everyone who becomes unemployed stands the best chance possible of getting back to work, including making available £79 million of additional European social fund money to support people who become unemployed," he adds.
In November, the number of people claiming jobseekers allowance jumped 75,700 to hit 1.07 million.
The government and the Jobcentre Plus have also agreed a five-point pledge to anyone who becomes unemployed. This includes ensuring everyone has access to work advisers, giving more help with CVs and application forms, and support for retraining.
Economists at Barclays predict that the unemployment rate will rise to 8% by the end of 2009 - equal to a loss of over 600,000 jobs over the next 12 to 18 months.
Alison Tattersall, head of customer and proposition of financial planning at Barclays, says unemployment is now a top concern among people. “Many more people are likely to be concerned about their employment situation going into 2009, which will have a profound effect on people’s financial behaviour,” he adds.
Citizens Advice reports an increase in the number of people seeking advice about redundancy, applying for jobs and claiming Job Seekers Allowance.
Since April 2008, the charity has seen a 125% jump in the number of enquiries relating to redundancy, from under 200 per working day to 425.
David Harker, chief executive at Citizens Advice, says: "Rarely a day goes by without reports of yet another company announcing job cuts. In this current climate it’s imperative to know your rights and be able to access free advice if you have been made redundant or fear you may be.”
Ben Read, managing economist at the Centre for Economics and Business Research, warns there will be much worse news on jobs front in the months to come.
"During the last recession in the early 1990s the biggest single monthly increase in the claimant count was 119,000," he adds. "It will be no surprise if we see a similar monthly rise within the next two or three months, as the economy starts to contract very sharply."
People aged under 25 are most at risk of becoming unemployed, according to youth charity, The Prince's Trust.
Recent research from the University of Sheffield suggests two out of five people who became unemployed in the past three months were under the age of 25.
Martina Milburn, chief executive of The Prince’s Trust, says: “Youth unemployment costs our economy around £10 million a day in lost productivity. Only by helping young people into work can we save the UK economy billions each year and tap into this lost potential.”