Unemployment at its highest since 1995

UK unemployment rate is now at its highest level since 1995 after the number of unemployed people rose by 48,000 to 2.67 million between October and December last year.

It is now at a rate of 8.4% - 0.1% higher than the previous quarter - according to the latest results from the Office for National Statistics (ONS).

The number of young people aged 16-24 without a job was also up by 22,000 to 1.04 million compared to the three months to September.

In addition, there were 6,900 more people claiming Jobseeker's Allowance in January than the previous month, bringing the total number receiving the benefit to 1.6 million.

"Unemployment rose less than many had expected during the fourth quarter but it continues to climb," said David Birne, an insolvency partner at HW Fisher & Company.

"The slow but sure rise in the unemployment rate reflects the slow but sure decline of the economy. 2012 will see the unemployment rate continue to rise, as the public sector job cuts feed through," he added.

John Pollock, group board director for Legal & General's risk businesses, echoed this sentiment. "Budgets are being squeezed at every level as people try to manage, particularly with the high cost of food, fuel and utilities. The recent period of severe freezing temperatures will not have helped this situation and put an additional burden on many."

The latest ONS figures also showed that average earnings (including bonuses) rose by 2% in the last quarter compared to the previous year. However, this is unchanged from the previous quarter.

In the private sector, average pay per week was £462 in December, an annual rise of 2.3%, while in the public sector this was £477 - an annual increase of 1.7%.

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