Unemployment

Britain's economy has been hit with more bad news as figures reveal unemployment is at its highest level for almost a decade. Experts also warned that the jobless total could hit two million by next year.

There were 1.72 million people out of work in the three months to July, up by 81,000 from the previous quarter and the highest total since the spring of 1999.

The number of people claiming jobseeker's allowance rose for the seventh month in a row in August, by 32,500 to 904,900 - the biggest monthly hike since December 1992.

The Office for National Statistics said the trend on both the claimant count and the wider number of jobless was increasing.

Vacancies were down to their lowest level for more than a year to 613,200 after a fall of 56,900 in the quarter to August.

Economic inactivity also worsened, with the number of people on long-term sick leave, looking after a relative, students or those who have given up looking for a job up by 4,000 to 7.86 million - 20% of the working age population.

Those in work have little to cheer about either, as a separate report from the Bank of England said the average pay rise for workers in the public and private sector, excluding bonuses, was 3.7%, compared with inflation of 4.7%.

Copyright © PA Business 2008

James Wright from law firm Irwin Mitchell said: "Increased unemployment levels means it becomes harder for employees to find new work. As a result more employees seek to challenge their dismissal by bringing legal proceedings."