UK Unemployment Up By 12,000 in May

A report from the Office for National Statistics states that unemployment rates have jumped by roughly 12,000 to a total of 1.62 million in May. Unemployment is roughly 5.2%.

The number of unemployed workers claiming benefits rose to 840,100 after a 15,500 jump, the biggest seen since the rise in December 1992. Several analysts have already expressed concern over this large growth.

The recent losses can most likely be attributed to higher costs for energy, a rough real estate market, and a general fall in consumer confidence. This is further backed by job vacancies falling to 655,100 from April to June, showing a drop of 32,200.

Those in the financial and real estate markets know this quite well, as they’ve suffered thousands in job losses as the companies try to rebuild. Bovis, Barratt, Persimmon, and Redrow alone announced job losses this month that total 2,000.

This is accompanied by falling growth in average annual earnings. This fell from 3.9% in April to 3.8% in May. The rapidly increasing cost of food and fuel mean that wage growth is need more than ever if the consumers are to stay strong.

Specific examples from Engineering Employers’ Federation are just as telling. They’ve seen a stagnant pay settlement rate of 3.1% for the three months before June. Workers in the various local governments also went on strike last Wednesday to demand that their wages hold pace with increasing costs of living.

Officials at the Bank of England are worried about another possible issue. They fear that the 3.8% rate for consumer inflation will frighten workers into demanding higher pay, which would only exacerbate the inflation. So far these fears have yet to come true.

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