19/01/2006 16:47:00
UK unemployment has hit a three-year high, new figures show.
Official figures from the Office of National Statistics reveal that 1.53 million people were out of work in the November, an increase of 111,000 over the preceding three months.
This represents the largest quarterly rise in unemployment in 12 years. Overall unemployment now stands at five per cent, with 909,100 people out of work and claiming benefits last month, an increase of 7,200.
Furthermore, the number of job vacancies has also fallen, declining by 12,700 to 606,500.
The manufacturing sector was the worst hit, losing 109,000 jobs over the quarter.
Analysts are now speculating as to the wider ramifications of rising unemployment.
Consensus is mounting that it may encourage the Bank of England to agree to another cut in interest rates, especially when considered alongside the recent fall in inflation and consumer spending slowdown.
"The UK labour market is showing the first genuine signs of weakening, as employment is now falling, unemployment is rising and wage growth slows," said John Butler, UK economist at HSBC.
He said that the latest figures support many analysts' predictions that the next move by the Bank of England would be to reduce the underlying cost of borrowing.
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