Jobless benefit claims climbed from May by 23,800 to 1.56 million, the highest level in 12 years, the Office for National Statistics said in London today. Overall unemployment in the quarter through May increased by 281,000, the most since records began in 1971.
Prime Minister Gordon Brown is trying to pull Britain out of its worst economic contraction in five decades less than one year before the next election. Reports yesterday showed the housing market improved last month and retail sales rose from a year earlier, while Bank of England Deputy Governor Charles Bean said today the economy is probably bumping along the bottom.”
The claimant-count increase on the month was the smallest since May 2008, the statistics office said.
Overall unemployment, measured by International Labour Organization standards, rose to 2.38 million, the most since 1995. The British Chambers of Commerce said last week that unemployment may reach 3.2 million by the middle of next year.
The jobless rate on the ILO measure was 7.6 percent, the statistics office said. That compares with 9.5 percent in the U.S. and the euro region, and 5.2 percent in Japan.
For now, companies are still planning to shed workers. British Airways Plc said yesterday that it must push through job and pay cuts for the airline to survive the recession. Corus, Europe’s second biggest steelmaker, may shed as many as 366 workers at a factory in northeastern England.
The job market will eventually improve if a recovery takes root. The economy’s pace of contraction probably slowed to 0.4 percent in the second quarter from 2.4 percent in the first three months of the year, according to the National Institute of Economic and Social Research.
The housing market improved last month as more real-estate agents and surveyors in London said prices rose than fell, the Royal Institution of Chartered Surveyors said yesterday. Same- store retail sales increased 1.4 percent from a year earlier, the British Retail Consortium said.
The prospect of further job losses is keeping wages down. Excluding bonuses, earnings grew 2.6 percent, the least since records began in 2001. Average earnings in the three months through May rose 2.3 percent from a year earlier, the statistics office said.