Unemployment reaches above 1m!

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Story from Yahoo! News

Link - http://uk.news.yahoo.com/22/20081217/tuk-uk-britain-unemployment-fa6b408.html

The number of Britons out of work and claiming benefit rose for a tenth consecutive month in November and by the largest amount since March 1991, official data showed on Wednesday.

The leap of 75,700 on the month was much more than expected and took the total number on jobless benefit to 1.072 million, surpassing the psychologically-important one million mark for the first time since 2001.

The figures confirm anecdotal evidence that the pace of redundancies has accelerated as firms shed workers in the face of tumbling demand, and will give added urgency to the political debate over how to handle the recession.

"I think what's interesting is the scale of job losses this early in the cycle," said George Buckley, chief UK economist at Deutsche Bank.

"Unemployment is normally a lagging indicator so to see so many job losses this early in the cycle is extremely worrying."

The pound hit a record low against the euro after the data, which coincided with minutes from the Bank of England which showed policymakers had discussed an even bigger rate cut this month than the one percentage point cut it enacted.

The broader ILO rate of unemployment rose to 6 percent in the three months to October from 5.8 percent the previous month.

That took the total to 1.864 million.

Worse is almost certain to come. Bank of England policymaker David Blanchflower has forecast unemployment will rise above 2 million on this measure by Christmas and peak above 3 million in 2010.

In a further sign of a weakening job market, the number of vacancies fell to its lowest level since records began in 2001.

Amit Kara, an economist at UBS, described the figures as "absolutely horrible" and said unemployment would continue to rise for another two years.

"We are in for a period of prolonged pain," he said.