Unemployment in the UK rose to its highest level in more than a decade in the three months up to September as the British economy tips into recession.
Employment Minister Tony McNulty called the figures “bad” and “disappointing.”
The number of people on jobless benefit rose by 36,500 during the period. That is the biggest increase since December 1992, when Britain last suffered a recession.
The total number of those out of work has climbed to 1,825,000. That is 5.8 percent of the working population.
Business analyst Vanessa Redwood believes the situation will get much worse: “I think it is worrying that unemployment has risen so quickly so early on in the economic downturn; of course the labour market reacts with a lag of around six months to developments in the wider economy, and so we haven’t really seen the full effect on the labour market yet of the downturn we’ve already seen, yet alone the full force of the recession that is yet to come.”
On Wednesday, the Governor of the Bank of England, Mervyn King, admitted for the first time that the UK economy has probably already tipped into recession and inflation could collapse.
As recently as August, King was still suggesting inflation was likely to rise.
Defending that King told a news conference: “It is always possible to set policy with the benefit of hindsight. There’s no way in which the committee can always have perfect foresight. What it has to do is always each and every month look at the balance of risks.”
The Bank has been criticised by some economists for not seeing the recession coming and not cutting interest rates soon enough.