UK Unemployment Climbs as Cameron Becomes PM

Wed 12 May 2010, Category: unemployment

As reported by Bloomberg on May 12 “UK unemployment climbed to a 16- year high in the first quarter, underlining the fragility of the recovery as Conservative David Cameron begins his premiership.”

Unemployment measured by International Labour Organization methods rose 53,000 to 2.51 million, the Office for National Statistics. The number of people claiming jobless benefits fell 27,100 in April to 1.52 million. The median forecast in a Bloomberg survey was for a 20,000 drop.

The figures come a day after Cameron and Liberal Democrat leader Nick Clegg agreed to form Britain’s first coalition government since World War II after inconclusive May 6 elections. Newly appointed Finance Minister George Osborne said the jobless increase confirmed the “difficult situation” facing the U.K.

“The level of unemployment remains too high and that is a key issue for the new government to address,” said David Page, an economist at Investec Securities in London.

Jobless Rate: The ILO jobless rate rose to 8 percent from 7.8 percent, compared with 9.9 percent in the U.S., 10 percent in the 16- nation euro region and 5 percent in Japan. With a fifth of 16 to 24-year-olds out of work, Cameron has pledged the biggest employment program in British history.

In March, the number of jobless claims fell by 32,700 instead of the 32,900 drop originally reported. In April, the claimant count rate dropped to 4.7 percent, the lowest since May 2009, from 4.8 percent.

With public-sector jobs under threat as Britain cuts government spending, Cameron is counting on private companies to drive the labor-market recovery.

Royal Bank of Scotland Group Plc, Britain’s biggest government-owned bank, plans to cut 2,600 jobs at its insurance and consumer banking divisions, according to a person with knowledge of the plan.

Read the Full article by Svenja O’Donnell at Business Week

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