UK unemployment: January jobless rises 2,400

16th February 2011

The number of those claiming jobless benefits stood at 1.46 million at the end of January, according to the Office for National Statistics.

Unemployment also increased on a long-term basis, rising by 44,000 in the three months to December to hit 2.49 million, as the economy contracted.

The Guardian says the weaker-than-expected figures underline the challenge facing the government in restoring the feelgood factor to voters already battered by tough economic times.

It also points out that women appear to be bearing the brunt of job losses: the number of men claiming unemployment benefit fell 5,400 between December and January, while women claimants rose by 7,800.


On the Telegraph Howard Archer, chief economist at IHS Global Insight, said the slow down in wage growth was "rare good news" for the Bank of England.

He said: "This indicates that higher inflation and rising household inflation expectations are so far not feeding through to push up wages."

He added: "We expect wage growth will remain muted due to workers' weak bargaining position given high and likely to rise unemployment. This is a key factor underpinning our belief that the Bank of England will only raise interest rates gradually even if they act in the near term, which is looking increasingly likely."

On Citywire it was reported that sterling, weakened 0.42% against the euro, to €1.19 on the news. The yield on ten-year gilts, a benchmark often used to price long-term commercial borrowing, rose to 3.83%.

On the Guardian readers questioned commentators' claims that the rise was unexpected.

petercs said" "This may have been unexpected by you (article's author) but everyone, who reads the Guardian, have read about job cuts."

Corinthian11 adds: "Unexpected who by – inhabitants of the Planet Zog?

The slow rise in unemployment will continue until April and then it will really accelerate as the coalition's policies hit home."

davidabsalom points out that the rise could be seasonal: "oesn't unemployment usually go up in January when the Christmas jobs end?"


ByGeorge said the number of younger people unemployed was the most shocking aspect of the announcement. "Almost 1 million – yes 1 million – 16-24 year olds unemployed, which is a scandal. At the same time they are expecting people to work longer. If you didn't know better you'd say it was deliberate.

"Next stop – scrapping the minimum wage as a solution to the unemployment problem- just wait and see."

On the Telegraph mbaproperty pointed out that the effect of the government's austerity programme had yet to take hold.

"I have been saying unemployment would be an issue and we havnt even had the majority of austerity cuts yet. We are going to have poor Q3 ansd Q4 growth figures. Given this an interest rate rise would be rather stupid as they detrimentally effect growth. Fingers crossed they put rates up then can enjoy a decade of poor growth, high unemployment and zero % interest rates :)"

mrgreedy posted on the subject of job creation:  "Go out and create jobs by starting a business. There's no such thing as a magic job machine. Find something that you're good at and that people need and get on with it."

19 thoughts on “UK unemployment: January jobless rises 2,400”

  1. Anonymous says:

    The Greek media report that Venizelos will try to persuade the troika that their recipes are wrong and there is no point to enhance the austerity. Issues with taxes, reforms are being tackled but it will take time for spectacular results. I believe is a frank assessment. Again, I say that Greece won’t voluntarily leave the Euro, but she might be made to do it. I think the Dutch has said that they won’t participate to the new package if Greece deviates from targets (i.e. they do not care, more austerity, more unemployment etc.). I don’t think that the Greek government can implement a n-th packet (n tends to a big number) of austerity without elections and I think there is no time for elections. Do we reach the end-game? I hope so. I am sick and tired of the uncertainty.

    1. Anonymous says:

      The trouble with the EU’s plan to play for time and hope something comes along is that everyone gets bored and fed up with the absence of a proper resolution of serious problems. And the annual holidays end soon. Mind you, if proper resolution means dictatorship by Merkel and Sarkozy, perhaps muddle and procrastination are better. Whoever gave that gruesome duo the right to decide what happens in the EU?  Why don’t the rest get together and challenge their incompetent hegemony?

      1. James says:

        good points well made!
        I think that delay has also ended up with more countries facing problems. Had Greece been dealt with honestly and properly in the first place, I suspect that Italy would never have been dreamt of as a basket case

        1. Anonymous says:

          Had the banking crisis been dealt with honestly and properly in the first place, I suspect that Greece would never have been dreamt of as a basket case

  2. Sovjohn says:

    Above and beyond the statistical data – Greece’s social security funds are juggling with their finances on a monthly basis to be able to continue paying pensions.

    The prolonged recession has worsened their finances to a breaking point. The country’s main institution, IKA, which caters for all employees of the private sector and a portion of the public sector as well, has exhausted its yearly funds allocation from the state budget in July. It now seeks over €600m to be allocated from the state budget until the end of the year, so that it can continue paying pensions and compensate for health / medical expenses.

    Mind you that the state-approved compensations for several items are absurdly low, for instance a pair of eye glasses is compensated up to 80 EUR (60 GBP or so) once every 2-3 years, with this price usually being far from enough to actually buy a pair of glasses (frame+crystals). Yet this is what one gets. The levels are even lower in regards to blood tests or dental operations, if I remember correctly (start from 8 EUR unless I remember wrong). “Luckily” medicine expenses are covered at 75% of the expense.

    The fact is that the meteoric rise of unemployment (and at this point I remind you that unemployment metrics in Greece are aggressive – if you were independently employed or a shop/business owner / partner, you are not eligible to be registered in the unemployment charts. And several / many people who are looking for work do not bother to renew their registration when they receive no unemployment benefits, hence they are “not counted”) has drastically dropped the income levels of the social security funds.

    The decrease of 10%-40% of wages has not helped, either, considering that the contributions towards insurance/social security/pension work in tiers, and the lowest tier of 700-800 EUR / mo  contributes far less than, say, 1,500 EUR / mo. Salaries of 1,500 EUR/ mo upwards have become very hard to come by, even for experienced professionals who might be paid 2,000++ before the recession.

    As such, none of my age, and none I know who is up to 35-40 yrs old believes that our generations will get any pension at all. We may get food stamps, by then, or just thin air. The contributions seem more meaningless as time goes by, especially considering that the quality per se of health services provided is quite abysmal, and certainly not worth anything like their current deductions.

    Happy times. :)

    1. Anonymous says:

      Some complaints make sense, some not so much to me for a country with such an enormous debt.
      ‘state-approved compensations for several items are absurdly low, for instance a pair of eye glasses is compensated up to 80 EUR (60 GBP or so) once every 2-3 years, with this price usually being far from enough to actually buy a pair of glasses (frame+crystals). Yet this is what one gets.’
      compensation for eye-glasses, without means testing? even if it is low what a luxury for a country close to bankruptcy. Why I think that it is usually used for the offsprings of pensioners to get sunglasses?
      ‘The levels are even lower in regards to blood tests or dental operations’
      You should go to the UK for dentistry and you would suddenly love the Greek system
      Greek NHS should do what the UK NHS does:

      1. Andy Zarse says:

        Vassilis, I just bought not one but two pairs of Jasper Conran designer eye glasses for around Eu110, the shop had some much cheaper, around Eu35 a pair and they were still nice looking. Can you explain, why is it that spectacles are twice as expensive in Greece than in Horsham High Street, one of the most expensive and desirable towns in the UK? Is it because we have six opticians shops and there’s competition? Is the Greek system State controlled? Just interested in the reason, it may be a nice parallel to draw…

        1. Anonymous says:

          I guess: high tax, black economy (there is private wealth in Greece), greedy shop-owners used to earn too much

          1. Andy Zarse says:

            Vassilis, as you know, we’re all in a single european market, there’s nothing to stop anyone in Greece by-passing the greedy local opticians (and other shop owners come to that) and use the power of the internet to bring the local market into line with the rest of Europe

          2. Anonymous says:

            See above, made a mistake and replied to myself!

          3. Andy Zarse says:

            Cheers Vassilis, that makes sense! But it does seem there must be some business opportunities in Greece somewhere…


          4. Anonymous says:

            ‘Currently we don’t offer delivery outside of the UK’
            Similar services can be poor in Greece. Pensioners do not have access to computers usually. The network is quite poor, post services are poor, deliveries are poor and people do not trust to order on line. Needs investements and guess what there is no money.

      2. Sovjohn says:

        I forgot to reply to that, Vassili :)

        Myself, I had to pay for all my glasses and eye doctors privately while growing up, because I didn’t have family insurance back then. I have thus paid for the bulk (you know, should be more than a million in drachmas) of my optical issues privately, over the years. Children tend to need plastic lenses that don’t break, and while children grow, they need glasses every 6 months.

        If I projected needing glasses every 6 months nowadays, it’d be at least 250-300 EUR every 6 months for me, and this doesn’t pick Armani frames exactly, the crystals alone cost 200+ in many cases.

        So no, I don’t see it as a “luxury”. They could at least review the compensations provided more regularly according to inflation. I stress that in many cases, including blood tests, eye tests, dental tests, the lot, the prices “compensated” are based in, say, 1990 projections. And if in 1990 you could visit a doctor with 20 EUR of today, today you can’t, yet you are compensated on that basis.

        As a “young worker”, I don’t feel partial to be stripped of all health insurance benefits which I actively pay for, just for the system to be able to award higher pensions. I suspect that by merely capping all pensions to 2,000 EUR, and ensuring that no dead people or fraudsters get benefits / pensions, the problems would be a lot less.

        As a sidenote, I am a fan of NHS compared to IKA, and I’ve lived in the UK to know it first-hand. It’s not perfect, but it’s far better than IKA, sorry to say that.

  3. James says:

    I feel very sorry for the Greeks, but I would make the following comments about the Finnish requirement for collataeral:
    1. I cannot blame them for trying to jump the queue. I don’t see the UK getting its money back from Ireland in a hurry, as we have no collateral;
    2. Surely even the current lot of politicians running the EU can see that there may be a tiny bit of opposition from the net contributors to a fiscal union/Eurobond issue. Here we have a defined country, Greece, with a defined amount of help being offered, and a raft of countries want collateral (i.e. expect their money bacK!!). The EU’s or, more accurately, France and Germany’s economic harmonisation proposals would offer:
    a) no collateral to anyone;
    b) an unspecified amount of money;
    c) a list of countries, also unspecified, taking part.

    Will someone please take the only sensible option and let Greece default and leave the Euro?

    1. Anonymous says:

      Isnt this an internal eurozone default pending the ESM in 2013 : liquidate debt through national banks and ECB and EFSF on a limited shared platform; firewall exposed banks using some of their money by extending debt maturity and increasing capital build up; force Greeks to cut their balance sheets – leave Euro intact and call markets’ bluff – I am not sure Greeks look at default as sensible…..

    2. Anonymous says:

      I hate when somebody tries to jump the queue and I totally blame them for this. I wouldn’t blame them if they were brave enough to say a big no and contribute nothing even veto the whole thing (many Greeks would be thankful, they would love to default) but of course they are too coward to do this. Collateral? what collateral? from a country that is in selective default and negotiates haircuts? LOL, who will pay this? all the rest, no surprise that the other countries are unhappy with this.

    3. Anonymous says:

      Credit the harmonization proposal to Sarkozy and Merkel.  It needs some flying pigs to help it take off. The Germans may depose Merkel before they accept it.

  4. Fletch says:

    I was going to joke Greek collateral can be their islands.

    I could seriously see this happening. Germany has mentioned it.  Slovakia and Slovenia could do with a coastline/undisputed coastline.  Finland probably wants a hot place to go on holiday.

    1. Anonymous says:

      I couldn’t. Greek government has excluded in rem collateral. Greek Prime minister has clearly said that this has been tried by countries and said that it is out of the question (default and exit of union is preferable in this case). He cannot do otherwise, he will be tried for high treason 100% and people will get arms and fight.

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