British jobless total soars to highest point since 1994

21st April 2010, Comments 0 comments

Britain's jobless total has hit the highest level since late 1994, but the number of people claiming benefits fell by more than expected in March, official data showed on Wednesday.

With a general election looming on May 6, economists argued that the mixed data would be difficult to make political capital out of.

The Office for National Statistics (ONS) said in a statement that unemployment rose by 43,000 to 2.502 million people in the three months to February, under the International Labor Organization measure.

That was the highest total since the three months to December 1994, according to the ONS.

However, the number of Britons claiming benefits slid last month by 32,900 to 1.54 million people -- which was the fourth drop in the last five months.

That surprised economists because market expectations had been for a smaller decline of 15,000, according to analysts polled by Dow Jones Newswires.

"This ... tells us that more people are unemployed, but fewer are claiming benefits," said ING economist James Knightley.

The drop in February's claimant count was meanwhile revised to 40,100 -- which was the sharpest decline since June 1997.

"The latest labour market (figures) are a real mixed bag -- thereby giving ammunition for politicians of all leanings," added IHS Global Insight economist Howard Archer.

"The mixed latest data reinforces our belief that it is premature to call the all-clear on the jobs front, despite recently improved economic activity and the overall resilience of the labour market."

The ONS also revealed that Britain's unemployment rate rose to 8.0 percent in the three months to the end of February.

That compared with 7.9 percent in the September-November period, and was the highest level since the three months to September 1996.

Britain's Labour Prime Minister Gordon Brown, on the election campaign trail in Cardiff, said the data highlighted the fragility of the economy, which escaped from a record recession in late 2009.

"Unemployment in March has started falling, the claimant count," said Brown.

"But, yes, February was one of the most difficult months and it just shows how fragile the economy is."

But Theresa May, work and pensions spokeswoman for the opposition Conservatives, described the jobless figures as "worrying".

"Nothing could give clearer evidence that Labour's policies are not working," she told a London news conference.

Later this week, on Friday, investors will focus on the first official forecast of gross domestic product for the first three months of 2010.

Britain escaped from a record recession in late 2009 as GDP -- the value of all the goods and services produced in the economy -- grew by 0.4 percent in the three months to the end of December.

That marked the end of a deep recession, after six successive quarters of contraction -- which was the longest downturn in modern British history.

© 2010 AFP

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