UK unemployment soars to 2.67m

The unemployment rate is now 8.4%.

The number of people who claimed Jobseeker’s Allowance in January increased by 6,900 from December to 1.6m.

Youth unemployment also rose by 22,000 to 1.04m in the three months to December, taking the unemployment rate for 16 to 24 year-olds to 22.2%.

The number of job vacancies rose by 476,000 in the three months to January.

Figures from the ONS also showed that average earnings increased by 2% in the year to December, unchanged from the previous month.

Around one in three of everyone unemployed in the UK have been looking for work for over a year, accounting for 823,000 people.

John Pollock, group board director for Legal & General’s risk businesses, said: “The unemployment rate has not been higher for over 17 years.

“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 additional burden on many.”

But David Birne, partner at HW Fisher & Company, said the numbers were better than many had expected.

He said: “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.”

Birne added that as ever, the issue was one of confidence.

He said: “So many SMEs are simply not confident enough to take on new staff.

“Even those that are confident are being restricted in their growth by the lack of finance from the banks.

“They want to grow and increase their numbers but they cannot grow if the money isn't there.”