Press Story

Immediate Release

Reacting to today's rise in unemployment, the think tank IPPR says the most worrying of news is that pay rose by the lowest rate of increase since current records began. Although youth unemployment did not hit one million as IPPR expected, it still rose by 20,000.

? Unemployment rose by 70,000 (to a total of 2.56 million, or 7.9%)

? Youth unemployment rose by 20,000 (to a total of 979,000)

? Long-term unemployment rose by 8,000 (to a total of 900,000)

Tony Dolphin, IPPR Chief Economist, said:

"Today's figures suggest weak output growth is beginning to impact the labour market. Employment fell in the latest quarter and, although the drop was only 2,000, this was the first fall for 16 months. Meanwhile, overall unemployment increased by 70,000 and there were also rises in youth unemployment (up 20,000) and long-term unemployment (up 8,000).

"However, the most worrying news is that pay, excluding bonuses, rose by just 1.0 per cent over the last year. This is the lowest rate of increase since current records began in 2001 (and probably the lowest since at least the 1960s). This compares with an inflation rate, announced yesterday, of 2.8 per cent.

"While pay is increasing so much less rapidly than prices, households' spending power will continue to be squeezed. With exports held back by recession in Europe, the government cutting its spending and businesses reluctant to invest, it is no surprise that the IMF has cut its forecast for UK growth in 2013 to just 0.7 per cent.

"In these circumstances, more needs to be done to help the most vulnerable groups, including the young and long-term unemployed. IPPR has long argued for a job guarantee for any person who has been out of work and claiming JSA for more than a year, with an obligation on the part of the unemployed person to take the job or find an alternative."

Notes to editors:

For today's latest unemployment statistics, see here.

IPPR's report - Jobs for the Future: The path back to full employment in the UK - is available from here.

The final report of IPPR North's Northern Economics Futures Commission is available here

Contact:

Richard Darlington, 07525 481 602, r.darlington@ippr.org

Tessa Evans, 07875727298, t.evans@ippr.org