The number of people out of work and claiming unemployment benefit in Britain rose for the 11th consecutive month in December.
The figures confirm anecdotal evidence that more people are being laid off as banks withdraw credit lines from companies, forcing them to take dramatic cost saving measures. The total is approaching two million, the highest for over a decade, at 6.1 percent of the working population. Increasingly for people like laid off graphic designer Michael Winter there are no alternative jobs as the number of vacancies has fallen to a record low. He said: “People in my position – middle income earners – are being made redundant, and there’s no real safety net, and no procedures in place to help get them back to work. A lot of money is being thrown at the banks, in the hope that that’s going to alleviate the situation; in reality, as we now know, it isn’t.” The figures also revealed a reduction in working hours. Most sectors lost jobs, with finance and business services hit worst. UK Employment Minister Tony McNulty said Job Centres are seeing that trend: “Given the nature of this downturn and the way – at the moment at least – it’s across all sectors, with perhaps an emphasis on the financial services sector, we do need to get to a stage where our Job Centre Plus Staff are used to dealing with people they’ve never dealt with before.” And things are set to get worse. The Bank of England’s Governor Mervyn King said Britain’s economy will likely shrink markedly in the first half of this year. King believes policymakers need to think about using more than just interest rates to stimulate demand. That would be so-called quantitative easing to boost the money supply.