News Column

Slow recovery for UK jobless

July 14, 2014

By Hugo Duncan, Daily Mail, London

July 14--Unemployment is still higher than before the recession struck despite dramatic falls over the last year, according to a new study.

Official figures are this week expected to show that the jobless rate fell again in the three months to May having dropped to 6.6pc.

But a report by union leaders at the TUC shows more than half a million more people are out of work than in early 2008.

A separate study by High Pay Centre shows that executive pay has grown from 60 times that of the average worker to almost 180 times since the 1990s.

The pay of the average FTSE 100 chief executive increased from pounds sterling 4.1m to pounds sterling 4.7m last year.

But with unemployment still elevated and most workers still suffering from subdued wage growth the TUC said talk of higher interest rates is misplaced.

It is thought that rates could rise before the end of the year having been frozen at 0.5pc since March 2009.

'Those hawks that are keen for interest rates to rise have forgotten that unemployment is still over two million,' said TUC general secretary Frances O'Grady. 'The talk in the City and around Westminster may be about a fast growing economy but the recovery still feels a good way off for millions of people still desperate for work across the rest of the country.

'High levels of youth joblessness are particularly concerning. The growing talk of a rate rise is a worrying distraction from this far bigger economic and social problem.'

Unemployment jumped from 1.6m or 5.2pc in early 2008 to a peak of 8.4pc or nearly 2.7m in late 2011. But it has fallen rapidly in recent months to just under 2.2m or 6.6pc its lowest level since late 2008 and well below the 7.9pc jobless rate the Coalition inherited from Labour.

The number of people in work has soared to a record high of more than 30.5m with the private sector creating jobs far faster than they are shed in the public sector.

The Office for National Statistics will publish the latest jobs figures on Wednesday with analysts expecting them to show unemployment down to 6.5pc.

Howard Archer, chief UK economist at IHS Global Insight, predicted a 'further marked improvement' in the labour market.

He said he now expects unemployment to fall to 6.1pc at the end of this year and to 5.8pc at the end of 2015.

'An unemployment rate of 6.5pc in the three months to May will likely fuel expectations that the Bank of England will start to rise interest rates before the end of 2014,' said Archer.

Bank Governor Mark Carney has warned households and businesses that higher interest rates are on the way. But he has insisted that the increases will be 'limited' and 'gradual'.

A Department for Work and Pensions spokesman said: 'The truth is that with the economy growing again we are now seeing record numbers of people getting jobs thanks to the government's long-term economic plan.

'Unemployment has just seen the biggest annual fall in 16 years and the unemployment rate is at a new five year low.

'There is still more to do, but it should be welcomed that more people are in work than ever before and thousands of people are getting jobs every single day.'


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Source: Daily Mail (London, England)

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