The jobs outlook will worsen early next year, ministers and business leaders warned on Wednesday, after the number of people claiming unemployment benefit last month topped 1m – the highest level for eight years.
Many employers are thought to be waiting until after Christmas before announcing redundancies. Tony McNulty, employment minister, warned that jobless figures for January and February “will be even more disappointing”.
He was responding to statistics on Wednesday showing that the numbers of people claiming unemployment benefit rose 75,700 in November to 1.07m, the biggest monthly rise since 1991. The total number in work fell 115,000 to 29.38m.
Total unemployment, including those on the dole, rose 137,000 to 1.86m during the three months to the end of October, according to the Office for National Statistics. This was the highest figure since 1997, when Labour came to power.
Amit Kara, an economist at UBS, said: “We are looking at a forecast [for total unemployment] of 3m in 2010, or higher.”
The number of people aged 18-24 out of work increased 55,000 during the three months to October to 597,000 – the highest figure since 1995. The number out of work for between six and 12 months has risen more than a third over the past year.
The Prince’s Trust charity said: “The number of young people who are either unemployed or inactive and not in full-time education is now nearly 1.3m, representing almost one in five.”
William Hague, shadow foreign secretary, standing in for David Cameron, the Conservative leader, at prime minister’s question time, accused Labour of being a “say anything, spin anything, achieve nothing government”. He urged ministers to support Tory proposals for a business loan guarantee scheme.
The number of job vacancies across the economy fell 49,000 to 562,000 during the three months to the end of November, equalling the lowest figure since records began in 2001. Redundancies increased to their highest for six years, rising 41,000 to 180,000 in the three months to the end of October.
The only areas to see any improvement were public-sector and part-time employment. The number of public-sector workers increased 14,000 to 5.76m and that of part-time workers rose 7,000 to 7.5m.
Average earnings including bonuses rose at an annual rate of 3.3 per cent in the three months to the end of October, the same as in the previous three months. Increases in average earnings excluding bonuses were unchanged at 3.6 per cent.