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UK Unemployment Grows to 16-Year High of 8.4%

Pound coin, Unemployment, Slow Economic Growth

The ILO Unemployment Rate released by the National Statistics is up to 8.4% – a 16-year high. The figure was expected to remain at 8.3% but with 2.68 million economically active people unemployed, 118,000 more than the quarter before, unemployment grew to a record level.

Total pay (including bonuses) rose by 1.9% on the 3 months to October 2011, with the average weekly wage rising to £464. But the annual growth rate for total pay slowed down from 2.1% to 2.0% stoking fears that the UK economy is not progressing as swiftly as predicted. 1,200 new jobless claims were made, markedly less than the 6,300 that was predicted, but the 1.6 million people currently claiming jobless benefits make up the highest number since January 2010.

Economists are predicting that growth will grind to a halt in the early months of 2012 before slipping into contraction up until the yearly midpoint. This revised growth projection puts pressure on the Pound and coupled with yesterday’s drop in inflation, it really opens the door to further monetary activity from the Bank of England. The current £275 billion pound Quantitative Asset purchasing scheme is now widely expected to see a boost as soon as in February.

Full-time education fell, possibly as a result of higher tuition fees, and this has placed more pressure on the jobs market as numerous people who were previously not seeking work are now struggling to find jobs amidst a troubling time for the economy.

The Pound has suffered immediate losses on the release, falling from 1.203 to 1.198 against the Euro Exchange Rate.

By Josh Ferry Woodard

Photograph Courtesy of Stock Images