Jobs setback for Government's campaign

This Is Money13 April 2012

THE Government was dealt a pre-election setback on the jobs front today when unemployment increased and more people claimed the jobseekers' allowance.

The claimant count increased by 11,000 last month to 828,700, the biggest rise mp for almost two years. The total number of people looking for work rose by 29,000 in the three months to February, to 1.43m, almost entirely due to more unemployed women.

The news came as wives and children of MG Rover workers were travelling to London to campaign against the threatened closure of the giant Longbridge factory in Birmingham, which threatened the loss of more than 20,000 manufacturing jobs.

In the same batch of figures, headline annual average earnings growth jumped to 4.7% in the three months to February, which takes it above the 4.5% level considered consistent with the Bank of England's inflation target.

Howard Archer, chief UK economist at Global Insight, says there is no clear message for the Bank on rates here: 'This is a real mixed bag that further confuses the near-term interest rate outlook.

'[Earnings growth] is countered by news that unemployment rose in both March and February, while the underlying earnings growth rate actually eased back to 4.3% in February.' So the next rate decision will depend on the strength of first-quarter GDP growth and consumer spending data and survey evidence over the next few weeks.

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