BRITAIN’S unemployment rate has surged to a 12-year high, with young adults aged 18-24 particularly badly affected, official data showed yesterday. The news confirms growing fears that unemployment will continue to rise for many months, even though the economy and the banking systems have stabilised.
Figures from the Office for National Statistics (ONS) showed that the UK jobless rate is now 7.6 per cent, putting the total number out of work at 2.38m, according to the broad International Labour Organisation (ILO) measure. The narrower claimant count showed that the number of jobless claiming benefits rose by just 23,800 during June, the smallest increase since May 2008, but economists concentrated on the much grimmer ILO figures and expect unemployment to peak at around 3m next year.
Young adults have been especially hard hit with the rate of unemployment for 18-24 year-olds soaring to 17.3 per cent, compared to 12.6 per cent a year ago, highlighting the tough jobs market that graduates are currently facing.
Nearly all of the large City banks have slashed their graduate intakes as the recession has worsened. One large investment bank said: “Obviously our recruitment is down on last year, but we are still very much committed to hiring talented graduates.”
Gordon Chesterman, director of careers at Cambridge University, said: “It is tough at the moment – many employers have reduced the number of vacancies that they have. But students also need to be more flexible and contemplate alternative careers.”
And young adults are likely to continue to experience difficulties in finding employment over the next couple of years. IHS Global Insight’s Howard Archer said: “Even if the economy does eke out some growth over the coming months, it is unlikely to be strong enough for some considerable time to come to lead to a net creation of jobs.”
Opposition politicians called on the government to do more. Theresa May, the Conservative shadow work and pensions secretary, said: “Labour are in denial about the true scale of the problem with ministers continuing to sleepwalk their way through the recession.”
Lord Mandelson, secretary of state for business, innovation and skills, yesterday admitted a decade of public spending cuts lies ahead despite the fact the recession is now coming to an end.