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Wednesday, April 21, 1999 Published at 13:33 GMT 14:33 UK

Business: The Economy UK unemployment rises

"Unemployment in the UK has risen for the second month in a row - marking an important turning point for the country.A booming economy saw unemployment fall to its lowest the lowest level since the early 1980s at the beginning of the year. However, the UK economy has slowed markedly in recent months.

The latest figures suggest unemployment is now on its way back up again even if the economy avoids a recession.

The latest figures provide grim reading for manufacturing workers. Job losses continue to mount as the strong pound and the slowdown in the world economy continues to hit the country's industrial heartland.

Difficult trading conditions have forced companies to cut costs and close factories.

The biggest increases in unemployment came in Scotland and the West Midlands, offset by a fall in London.

The figures prompted trade unions to warn that the UK was turning into a two nation economy. They called on the government to protect traditional manufacturing jobs Ken Jackson, general secretary of the Amalgamated Engineering and Electrical Union, said manufacturing was still "limping behind" the service sector.

"More must be done to ensure the UK does not lose its manufacturing base."

Some hope

However, there are is still some cause for optimism from the latest unemployment figures.

A boom in the services sector over the last few years means that a record number of people are still in work.

Stronger than expected earnings figures released at the same time as the unemployment statistics also suggests that the UK economy could be heading for a relatively quick recovery.

Rising unemployment

The number of people claiming benefit and the UK Government's preferred measure - the International Labour Organisation(ILO) jobless rate - both showed an increase for the second month in a row.

The seasonally adjusted claimant count rose by 2,000 last month to 1,314,400.

The rolling ILO figure, which includes people not on benefit but who are seeking work, jumped by 32,000 between December and February to 1,833,000.

Other figures published by the Office for National Statistics showed a continuing decline in manufacturing jobs, down by 116,000 in the three months to February to 4,058,000.

Grey Power

Average earnings increased by 4.6% in the year to February, up by 0.1% on January's figure.

Meanwhile the level of employment rose by 80,000 in the three months to February to 27.3m, the highest on record.

And there was better news for the older working population. The growing strength of 'grey power' is illustrated by the fact that the 50 to 64 age group is the fastest growing part of the workforce.

Employment minister Andrew Smith said: "I am very encouraged to see the progress which those in their 50s are making now in getting back to work.

"We have very large numbers of people in this age group who had more or less given up hope of getting back to work."

But Conservative employment spokesman Damian Green attacked what he described as the government's "misplaced complacency".

"Nothing can disguise how badly the manufacturing sector is being hit by Labour's extra burdens on business."

Mr Green said youth unemployment had now risen in every quarter since the New Deal was introduced nationally a year ago.

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