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Unemployment figures signal the toughest labour market since 1994

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Unemployment has risen to 2.68 million, increasing by 118,000 between September and November 2011.

The unemployment rate has not been higher since 1995 and the number of unemployed people has not been higher since 1994, according to official findings from the Office for National Statistics.

The employment rate for those aged from 16 to 64 was 70.3%, down 0.1 on the quarter and there were 29.12 million people in employment aged 16 and over, up 18,000 on the quarter.

The unemployment rate was 8.4%of the economically active population, up 0.3 on the quarter. The inactivity rate for those aged from 16 to 64 was 23.1%, down 0.2 on the quarter. There were 9.29 million economically inactive people aged from 16 to 64, down 61,000 on the quarter.

Charles Levy, senior economist at The Work Foundation, said: "The labour market statistics offer some tentative signs that the economy was stabilising at the end of last year. In the three months to November, employment actually increased by 18,000. This comes after very high job losses over the summer.

"This will however be of little comfort to the millions of workers who are facing the toughest labour market since the start of the recession. Comparing the three months to November last year with the previous three months, unemployment increased by 118,000.

"The young (16-24) and the older (50-64) bore the brunt of this. Those in work are also continuing to feel the squeeze as the economy substituted full-time work for part-time, permanent employment for temporary positions and employee jobs for often more precarious self-employment.

"This picture will only improve if we return to strong quarter on quarter employment growth."

John Salt, director at recruitment website Totaljobs, added: "Whether or not the UK is technically in recession, for those out of work the situation is already dire enough. The figures merely confirm what our Barometer has been telling us for three months now, that applications per job are at an all time high of 23, with not enough growth in the labour market to absorb the numbers being laid off.

"What's more the signs for 2012 just aren't good. The Eurozone crisis threatens not only jobs reliant on exports but also in the financial services industries. With retail already struggling following a lacklustre Christmas, it is difficult to see sectors in which we're going to see significant increases in available jobs."

But the ONS also reveled total pay (including bonuses) rose by 1.9% from 2010, down 0.2 on the three months to October 2011(with both the private and public sectors showing lower pay growth). Regular pay (excluding bonuses) rose by 1.9% on a year earlier, up 0.1 on the three months to October 2011.