UK’s unemployment crosses 2 million

As the impact of the recession in the UK settles, unemployment figures in Britain rose to 2.3 million as a non-lending banking system forced businesses to shut, house prices remained depressed and manufacturing slumped.

Releasing the figures today, the Office for National Statistics said that while 2.3 million have joined the ranks of the unemployed, the number of people on dole rose to 1.39 million in February 2009, up 138,400 over the previous month and 595,600 over the year.

A research agency had reported early this week, that  there were 10 people applicants for every job advertised in the UK. In Februaury there were 482,000 job vacancies, or a reduction of 203,000 jobs during the the year.

Early this month, the British Chambers of Commerce (BCC) had warned that unemployment across the UK would affect over 10 per cent of the workforce, or 3.2 million, by the second half of next year and said the fortcoming Budget was the government's "last real chance" to help lift the economy. (See: UK unemployment to touch 3.2 million by H2 2010)

The figures revealed that that the unemployment rate jumped to 6.5 per cent between November and January and growth in average earnings, both including and excluding bonuses, has fallen.

There was a fall in the employment rate but the number of people in employment has risen slightly, indicating that the 500-million job rescue plan announced by government has yet to take effect. (See: UK unveils £500 million job rescue plan amid losses)

Prime Minister Gordon Brown had said that this scheme would help more than half a million people get jobs or work-focused training in the next two years and the unemployed who want to start their own business would be given extra funding for training and receive government funds for a new start up venture for the first months of operations to help through the difficult start-up period.

While jobs have reduced in most sectors over the quarter, the finance and business services sector saw over 100,000 jobs being eliminated.

British industrial and manufacturing output declined to its worst year since 1931 falling for 11 months in a row in January and the total production output decreased by 5.6 per cent in the latest three-months against the previous three-months. The induistrial decline was 9.6 per cent compared to the last three months a year ago. (See: Recession grips UK as manufacturing output shrinks in January)

The International Monetary Fund said the UK would be last to recover from the recession compared to other major economies and warned that from the G7 group of leading industrial nations, UK's economy would continue to contract in 2010.