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UK: Jobless total rises to just below 2 mln

  Unemployment in Britain rose by 146,000 to 1.971 million in the three months to December, the highest level since 1997, but short of analyst forecasts that it would breach the two million figure.

The unemployment rate, according to the International Labor Organization (ILO) measure, was 6.3%, the highest since 1998, figures released on Wednesday showed. Experts said the outlook for the job market remained bleak at a time when Britain was in deep recession.

The unemployment total is the highest since the Labor Party took power 12 years ago, underlining the growing political pressures on Prime Minister Gordon Brown, who lags well behind the Conservatives in the polls.

“The two million mark is coming up and realistically going into 2010 it will probably be the three million mark that becomes more relevant,” said Mark Miller, an economist at HBOS. “There are few signs of joy in the labor market and nothing on the face of these data to suggest that the Bank of England won’t cut rates again.” The number of people claiming jobless benefits in Britain rose by less than expected in January.

The Office for National Statistics said the claimant count jobless measure rose by 73,800 to 1.233 million in January, the highest since July 1999, and a rate of 3.8%.

Analysts had forecast a rise of 90,000 on the month. The demise of companies like High Street retailer Woolworths, which employed 27,000, had been expected to inflate the numbers.

“The deteriorating labor market isn’t having much of an impact on pay growth yet ... (and) falling inflation means that real earnings growth is accelerating,” said Vicky Redwood, economist at Capital Economics. “However, rising unemployment will be a key factor ensuring that any money freed up by falling inflation is saved, rather than spent.” (Reuters)