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Recession puts more Britons out of work

BRITAIN'S unemployment rate increased to 7.6 percent as the country's steep recession raised the number of people out of work to 2.38 million in the March-May quarter, official data showed yesterday.

The unemployment rate was up from 7.2 percent in the three months to April, and the number of unemployed rose by a record 281,000, the Office for National Statistics said.

Some 301,000 people lost their jobs in the period, the second-highest figure on record and an increase of 31,000 over the previous quarter.

"On the basis of these numbers we reaffirm our forecast that unemployment will peak at around 3.2 million next year," said David Kern, chief economist at the British Chambers of Commerce.

Britain is suffering the effects of the world financial crisis and its own collapsed housing market bubble. Sagging growth has led the Bank of England to cut interest rates to a record low of 0.5 percent and take steps to expand the money supply, but it is expected that the job market will not recover soon.

"We doubt that unemployment will start to fall until GDP growth has got back toward its trend rate of 2.5 percent or so. And this might not happen for another couple of years," said Vicky Redwood, UK economist at Capital Economics.

The ONS also said that average earnings, excluding bonuses, declined 0.1 percent compared with the previous three months, but earnings, including bonuses, rose 1.4 percent.

Unemployment was worst in the West Midlands, a base for the UK vehicle industry, at 10.3 percent. Northeast England had the second-highest rate at 9.2 percent, while the southeast, including London, had a 6.1-percent jobless rate.

Brendan Barber, general secretary of the Trades Union Congress, said: "It's particularly worrying that over half a million unemployed people have been out of work for at least a year."


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