British outlook darkens as youth jobless tops a million
Britain's economic outlook darkened Wednesday after data showing one million youngsters out of work for the first time and as the Bank of England slashed its growth forecasts fearing more eurozone woe.
The number of unemployed people aged 18-24 in Britain rose by 67,000 to 1.02 million in the three months to September. The one-million figure was the highest since comparable records began 19 years ago.
The Office for National Statistics (ONS) also said the total number of jobless jumped by 129,000 to a 17-year high 2.62 million in the same period. That pushed the jobless rate up to a 15-year peak of 8.3 percent.
"The UK labour data were largely grim, fuelling concerns over the risks of recession and tying in with the markedly more pessimistic Bank of England outlook," said Howard Archer, an economist at consultants IHS Global Insight.
"The 129,000 jump in unemployment to a near 17-year high, with youth unemployment rising above one million, was particularly grisly news."
Britain's coalition government said the figures laid bare the overall impact of the eurozone debt crisis on the economy and pledged extra measures to support youth employment.
"These figures show just how much our economy is being affected by the crisis in the eurozone," said Employment Minister Chris Grayling.
"Our European partners must take urgent action to stabilise the position. Our challenge ... will be to put in place additional measures to support growth and create employment opportunities, especially for young people."
Although not a member of the eurozone, it is a hugely important trade and investment market for Britain.
While the Conservative-Liberal Democrat government blamed the bleak unemployment situation on the eurozone crisis, opposition lawmakers and trade unions said the coalition's own austerity measures were at fault.
"The brutal price our young people are paying for this government's economic policy is now crystal clear. The verdict is in: this government is failing an entire generation," said Liam Byrne, employment spokesman for the main opposition Labour party.
"Whoever the government tries to blame, the fact is Britain's economic recovery was choked off a year ago and unemployment started rising again well before the recent eurozone crisis," he added in a statement.
Looking ahead, the Bank of England on Wednesday warned that the "single biggest risk" to British economic recovery came from the long-running eurozone sovereign debt crisis.
"The prospects for the UK economy have worsened," the BoE said as it slashed its growth forecasts for this year and next.
The economy is expected to grow by no more than 1.0 percent in 2011 and 2012, compared with the previous guidance for about 1.4 percent and 2.0 percent respectively, the bank said in a quarterly update.
"Implementation of a credible and effective policy response in the euro area would help to reduce uncertainty and so support UK growth but its absence poses the single biggest risk to the domestic recovery," the bank added.
As Britain struggles to ensure economic recovery, the BoE earlier this month decided to hold its key interest rate at a record low 0.50 percent.
The central bank is also in the process of injecting another £75 billion (86 billion euros, $115 billion) into the economy, as it seeks to boost activity and avert a double-dip recession.
The BoE added on Wednesday that the worsening economic outlook would help push annual inflation to below the bank's official 2.0-percent target in late 2012.
Britain's 12-month inflation fell to 5.0 percent in October from a three-year high of 5.2 percent in September, largely owing to falling food prices. It had been spiking in previous months on soaring energy prices.
© 2011 AFP