UK economy heading for a

16th December 2010

The number of people out of work has made a surprise increase for the first time in six months. According to the latest figures from the Office for National Statistics, the number of unemployed people rose by 35,000 in the three months to October. There are now officially 2.5 million people out of work in the UK.

City economists had expected a 15,000 drop in the number of people out of work, which would have left the unemployment rate at 7.7%, according to The Guardian

John Harrison who commented on The Telegraph's boards last January saying: "Most private sector companies will not recruit in large numbers for the next few years and it is only a question of a few more months before the state at both national and local levels starts to make staff reductions….3 million by this time next year" now appears more astute than most of the experts.

Three years ago, the UK had an unemployment rate of just 5.2%, today the figure is 7.9% and Joanna Elson, chief executive of the Money Advice Trust, says that is going to be a growing trend.

The Department for Work and Pensions is forecasting that the number of young people facing long-term unemployment is likely to double next year.

A prospectus issued by the Department for Work and Pensions predicted that between 140,000 and 200,000 young people aged from 18 to 24 will be registered as having been unemployed for at least nine months or more between 2011-12.

This time last year the ONS reported 15,200 fall in the number of jobless claimants. Then the total number of people unemployed stood at 1.61 million.

Elson says: "Today's rise in unemployment reflects a longer term trend, and it is worth noting that these figures arrive before any significant public sector job losses.

"While sometimes the stats can seem a bit meaningless, we must remember the impact unemployment can have on people's lives."

Research conducted with the Legal Services Research Centre indicates that around 145,000 (5.8%) of these unemployed people will struggle as they get increasingly in debt. 

Elson says: "For every 1% increase in the ILO measure of unemployment, debt advice agencies receive an extra 60,000 enquiries per quarter. With many predicting a rise in unemployment next year, charities like ours have to brace themselves for an increase in demand for help.

"Today's figures state there are a little over 2.5 million unemployed people in the UK. Perhaps more worryingly, the same research found that of those who have been sacked or made redundant in the last three years 12.9% have unmanageable debt."

SEE ALSO: Britains inflation is only going to get worse

AND FOR SOME MORE CHEERFUL NEWS: BoE will make it harder to get a mortgage in 2011

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