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Office for National Statistics shows unemployment at its highest since December 1994

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Unemployment continues to rise in the UK with an increase of 53,000 jobseekers in the three months to March 2010, taking the total figure to 2.51 million, according to the Office for National Statistics.

The unemployment total is now at its highest level since December 1994. But the total number of people claiming unemployment benefit fell in April by 27,100 to 1.52 million. The rate of unemployment remained at 8%.

David Kern, chief economist at the British Chambers of Commerce (BCC), said: "The labour market figures are disappointing for the second month in a row, and support our forecast that unemployment is likely to hit 2.65 million towards the end of the year.
 
"In addition to the rise in unemployment, the figures show a large decline in employment, and a further increase in inactivity. The phenomenon of ‘under-employment' - the number of people working part-time because they could not find a full-time job - increased to a new record high.
 
"Additionally, public-sector earnings continue to grow at a much faster rate than the private sector - an unacceptable and unaffordable trend.
 
"In light of this, it is vital that the new Government takes forceful measures to enable businesses to create jobs and growth. It must go further than its early announcements, and scrap the entire planned rise in employers' National Insurance contributions without delay. Business confidence would also be helped by an immediate freeze of the total public-sector wage bill, and swift moves to tackle unfunded and expensive public-sector pensions."

And Nigel Meager, director of the Institute for Employment Studies, added: "Despite the early signs of economic recovery, it is clear that the new Government inherits a very fragile labour market. Unemployment stands at 2.5 million, economic inactivity at over eight million, and there are more than one million part-time workers unable to find full-time work. We will also begin to see public-spending cuts feed into the labour market this year. It is difficult to escape the conclusion that unemployment is likely to remain high for some time without sustained and substantial economic growth. The economic recovery is by no means securely established and it is to be hoped that the new administration's decisions on the timing of deficit reduction will take account of the risk of further damage to a labour market that remains weak."

The figures also show that there remain serious concerns about the level of youth and long-term unemployment. Long-term unemployment was up by 94,000 to reach 757,000, and youth unemployment was also on the rise again, by 9,000, having started to fall in the previous quarter.

Meager added: "These are hugely challenging times. Nearly 18% of young people are unemployed, and nearly a third of the unemployed are now long-term unemployed. Continued action to support these groups back into work will be critical in preventing the legacy of long-term worklessness in many communities following previous recessions. Any early dismantling of the existing measures targeted at young people and long-term unemployed would be premature, on the basis of these figures."