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Unemployment in Britain climbed nearer the 2 million mark in January as it soared to its highest level since 1997.
The Office for National Statistics said today the wider ILO measure of unemployment, which also counts those seeking work but not claiming benefit, rose to 1.971 million in the three months to December. Many economists had expected it to breach the 2 million mark.
The number of people claiming unemployment benefit rose by 73,900 last month – the fastest rate since February 2000, but less than some economists had expected.
Stephen Lewis, chief economist at Monument Securities, said: "The figures were not quite so bad as widely anticipated. That may simply be a timing difference. We know that in January there were a lot more lay-offs."
The unemployment figures are widely expected to get much worse as many of the recent job losses are yet to feed into the official data. A further 17,000 high street jobs were under threat yesterday as crucial talks between the sportswear retailer JJB Sports and its banks were coming to a head, while Stylo, the owner of the Barratts shoe chain, warned 5,400 jobs were at risk unless its creditors backed a plan to restructure the business.
Howard Archer at IHS Global Insight said: "Reports of companies laying off workers are becoming depressingly commonplace, while an increasing number of companies are folding. Latest labour hiring surveys clearly point to further sharp employment reductions. Indeed, it is highly possible that unemployment on the International Labour Organisation [measure] will reach 3 million by the end of the year, while claimant count unemployment could very well reach 2 million. Furthermore, unemployment seems likely to rise further in 2010 and we expect it to peak at 3.3 million on the ILO measure, giving an unemployment rate of around 10.5%."
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