UK jobless inches higher

December 12, 2001 Posted: 1210 GMT

LONDON (CNN) -- UK unemployment rose in November for the second consecutive month as the world's fourth-largest economy slows.

The number of people claiming unemployment-related benefits last month rose by 4,800 to 959,000, the Office for National Statistics said. The jobless rate remains close to a 26-year low of 3.2 percent.

The International Labour Organisation figure, the most closely watched figure, which includes people not eligible for benefit, jumped by 29,000 between August and October to 1,520,000.

The number of jobless people has now increased for two successive months for the first time since 1992. Still, the UK labour stats confirm the domestic economy is cooling at a much slower pace than in other G7 countries.

Work and Pensions Secretary Alistair Darling said: "We are living in testing times, but although both measures of unemployment have risen, they are still significantly lower than they were a year ago.

"The British economy has low inflation, sound public finances and low unemployment. This makes us better placed to cope with the ups and downs of the economic cycle than in the past and better placed than other countries."

Average earnings increased by 4.4% in the year to October, up by 0.1% compared with the previous month.

Today's figures also showed another huge fall in manufacturing jobs, down by 141,000 in the three months to October to a record low of 3,792,000.

Virtually all manufacturers lost jobs in the past few months, including electrical and optical equipment which lost 34,000 positions, textiles and clothing lost 31,000 and mineral and metal products, 25,000.

Some analysts predict the rise in joblessness will be tempered by other sectors.

Ian Steward of Merrill Lynch told Reuters: "There has been a big focus on job losses in the press, but jobs are being created, there are quite a few skill shortages in a number of sectors, particularly in the public sector so I think the outlook for the labour market is a gradual cooling not a sharp rise in unemployment.

"Unemployment is a lagging indicator so this isn't an indication of where the economy is going, it's an indication of where it has been."

And Ross Walker of the Royal Bank of Scotland told the news agency: "To some extent jobs created in the public sector will compensate for job cuts in the private sector."

The number of people in the workforce has also risen in the past few months as more men and women join the labour market because of an increase in the adult population.

The employment level in the quarter to October was 28.1 million, a rise of 24,000 over the three months following a big increase in the number of full-time jobs, which countered a fall in part-time work.