UK unemployment falls slightly to 2.47 million

Financial News

The UK saw a slight drop in unemployment figures in the three months leading up to July, according to statistics released this week.

The National Office of Statistics has revealed that the figure fell by 8,000 to 2.47 million between May and July. Although to be welcomed, the news has come as a disappointment to many experts who predicted the fall would be much closer to 40,000.    

The figures also showed that the number of people out of work and receiving unemployment benefit actually rose by 2,300 people to 1.47 million in August. This is the first increase since the start of the year and has led many to question the state of the country’s economic recovery.

Although the number of people unemployed in the UK may be decreasing, many experts fear it could only be a temporary trend. The coalition government recently announced a string of brutal spending cuts which have led many experts to predict a rise in the country’s unemployment figures in the coming 12 months.

One of Britain’s major bodies, the independent Office for Budget Responsibility, has estimated that as many as 500,000 public sectors could lose their jobs in the next year as the government looks to drive down the UK’s record deficit.

“Employment is likely to slow materially over the next few months as public sector job cuts take their toll,” commented Amit Kara, UK economist at UBS.

At the TUC conference in Manchester this week Bank of England Governor Mervyn King told attendees that although unemployment figures were higher than before the recession, they were still better than many had anticipated a year ago. He agreed the public sector cuts were necessary for the country’s economic recovery but admitted the UK’s financial outlook remained fragile.