April unemployment claims rise most since January 2010 in UK

UK unemployment claims rose in April at the fastest pace since January 2010, underlining the fragility of the economic recovery as government spending cuts and accelerating inflation sap consumer confidence.

Jobless benefit claims increased by 12,400 from March to 1.47 million, the Office for National Statistics said today in London. The median forecast of 24 economists in a Bloomberg News Survey was for no change. Unemployment measured by International Labour Organization methods fell 36,000 to 2.46 million people in the quarter through March.

Prime Minister David Cameron is relying on private companies to create jobs as his government eliminates more than 300,000 public-sector posts to tackle the budget deficit. The economy stagnated in the six months through March and Bank of England policy makers warned today that an interest-rate increase now could damp consumer spending.

“We think the unemployment rate will rise for the next 18 months,” said Ross Walker, an economist at Royal Bank of Scotland Group Plc in London. “The growth we’re getting is not particularly robust and you wouldn’t expect it to produce much job creation. In the medium term, there’s no need for an aggressive rate rise by the Bank of England.”

RULE CHANGES
The pound was 0.5 per cent lower against the dollar at $1.6175 as of 11:47 am in London.

The statistics office said the increase in the claimant count was partly driven by rule changes that shift mainly women from lone-parent benefits onto the unemployment roll. The number of woman claiming Jobseeker’s Allowance rose by 9,300 in April.

The unemployment rate based on ILO standards was at 7.7 per cent in the three months through March, down from 7.9 per cent in the quarter through December. That compares with 9.9 per cent in the euro region, 9 per cent in the US and 4.6 per cent in Japan, the statistics office said.

The increase in the number of people claiming jobless benefits last month put the claimant-count rate at 4.6 percent compared with 4.5 percent in March. Claims rose by 6,400 in March instead of the 700 increase initially reported.