UK unemployment has topped 2 million, official statistics show, the highest level since 1997. The figures published today by the Office for National Statistics (ONS) show that the unemployment rate was 6.5 per cent for the three months to January 2009, up 0.5 over the previous quarter and up 1.3 over the year. The number of unemployed people increased by 165,000 over the quarter and by 421,000 over the year, to reach 2.03 million.
John Philpott, Chief Economist at the Chartered Institute of Personnel and Development (CIPD) commented that the figures were the ‘most doleful set of jobs figures since the start of the recession’ .
Additionally the growing unemployment rates seem to be disproportionally affecting the motor industry, with unemployment rates in manufacturing, finance and business service sectors growing fatest. The affect has been demonstrated in cuts in motor manufacturing jobs such as at the Jaguar Land Rover who recently cut 450 jobs while 700 jobs are at risk as rumours spread that car hire company, 1car1 has called in the administrators. While motor finance dries up, the manufacturers look towards governments to bail them out and keep car sales moving. The downturn in car sales has also impacted on related services, car parts company Omron plans to close its plant at Stourbridge next year, causing the loss of 200 jobs.
Dr Philpott commented; “In proportionate terms the big losers according to the latest ONS figures are finance and business services, closely followed by manufacturing, with shops, hotels and restaurants another sector being hard hit. These sectors are at the forefront of a slump in job vacancies as well as redundancies.
Adding that; “As the CIPD expected, the latest figures show that the private sector is bearing all the pain of the recession, with employment in the public sector continuing to rise and public sector pay running away from that in the private sector. In the year to January, pay rises for public employees were rising at 4 per cent (including bonuses) compared with just 1.4 per cent for employees in the private sector and 1.8 per cent for the economy as a whole.
Meanwhile CIPD has also noted that he recession is impacting on age groups differently too;
“The recession is having a far bigger impact on employment for young people aged under-25, with older people now protected by anti-age discrimination laws and employers far less willing than in previous recessions to meet the pension liabilities associated with allowing older staff to take early retirement.”