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Contract and part-time employment help UK to record high, says ONS

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Labour market statistics published today by the Office of National Statistics (ONS) show that the UK unemployment total fell by 50,000 between June and August to reach 2.258 million, helping the unemployment rate to drop to 7.9%. An Olympics bounce and a growth in part-time work may have been factors in the rise.

The employment total of 29.59 million was the highest since records began in 1971.

Self-employment increased, up by 35,000 to 4.2 million, while the statistics also showed a rise of 13,000 in the numbers on Government-supported training and employment programmes, bringing the total to 158,000.

However, the figures showed 1.4 million people in part-time jobs because they could not find full-time work.

Minister for employment Mark Hoban said: "It is a real landmark to see more people in work than ever before.

"Despite the tough economic times, the private sector continues to create jobs and our welfare reforms are encouraging people to return to work - with 170,000 fewer people on the main out-of-work benefits than in May 2010," he said.

Bernard Brown, partner and head of business services at professional services firm, KPMG said businesses must look to the future: "It's good news that unemployment is down overall, but the question remains about what will happen to the younger generation.

"Right now the economic situation makes it easy to argue that organisations need experience to pull them through, but this is a short-sighted view.

"Today's workforce will not be around forever and unless businesses across the country put plans and people in place to share expertise and experience, they will find themselves bereft of the skills which can make them competitive, said Brown.

Yakub Zolynski, founder of UK recruiters, Market Mavens, said: "The continued fall in unemployment is a result of companies increasingly taking on contract and part-time work, but it's a positive nevertheless.

"More and more companies are leaning towards temporary and contract work, which leaves them far less exposed than taking on a permanent hire.

"The trend may reverse when the economy recovers but permanent staff are no longer the pillar of the employment market they once were," Zolynski said.

Felicity Staff, associate in the employment team at law firm Charles Russell, said: "Let us not forget the bolstering impact of the Olympics on these figures, which cover the June-September 2012 period. The fact remains that, in the wake of the Olympics, a staggering proportion of young people remain out of work (particularly in the North East of England)."

Staff added: "While the Government's Youth Contract Scheme is hoped to offer 500,000 opportunities for 16-24s over the next three years (by way of work experience, apprenticeships and wage subsidies), the self-confidence of many young people, and their hope of finding work, is waning."