Rising unemployment adds pressure for an effective growth strategy

15th May 2013

In the three months to March 2013, unemployment rose by 15,000, and employment fell by 43,000 Youth unemployment down 17,000, but still above 950,000 The claimant count fell 7,300 between March and April 2013  Commenting on the unemployment figures for May 2013, published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC) said: -It is disappointing that once again we are seeing a rise in unemployment, even if the figures are slightly better than expected.

However we have a relatively robust labour market in the UK, and a much lower unemployment rate than that of the eurozone. It is also pleasing that the number of those claiming benefits fell in April. -Worryingly, total pay has risen by only 0.4% compared with a year earlier, the lowest since 2009. With earnings growing at a rate far below inflation, disposable incomes are being squeezed, and it is important that the MPC takes no action that will add further to inflation. It is crucial that the government develops a stronger growth strategy, focusing on areas such as infrastructure, that will enable businesses to create jobs. John Wastnage, Employment Policy Adviser at the BCC, added:  "With unemployment rising and average wages falling, the latest labour market figures suggest the UK jobs market is starting to run out of steam. The weak economic climate is taking its toll on business confidence and public sector cuts continue to bite. Our own research also suggests we may see a further, modest weakening in labour market conditions over the coming months. "Against this backdrop, there is even more pressure on the government to implement a bold and effective growth strategy that will enable businesses to expand and to drive economic recovery. Businesses have the hunger and determination to do this, but need more support so they are able to achieve their full potential. The government should also look to radically shift its priorities through allocating more current spending towards capital investment, which will create jobs and wealth over the long-term."

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