Unemployment climbed 35,000 to 2.5m in the third quarter of the year – figures which indicate the first significant evidence of job losses in the public sector.

That takes the unemployment rate back up to 7.9% – the highest since the start of the year. 

Data from the Office of National Statistics showed there were 33,000 fewer public sector workers in the three months to October. This took the total down to 6.01m as the government spending cuts began to bite. But the number working in the private sector remained flat at 23.11m.

The overall employment rate was 70.6%, down 0.1% on the quarter.

There was little to cheer in the figures, according to economists. Andrew Goodwin, senior economic advisor to the Ernst & Young ITEM Club, said:

‘After the strongest quarter for job creation on record in the summer, the ILO measure of employment has now moved into reverse. We are already beginning to see the impact of fiscal retrenchment on the labour market, with public sector jobs being cut in Q3 and the private sector struggling to make up the difference.’

Meanwhile, the ONS said there were 839,000 people unemployed for more than a year, up by 41,000 over the three months and the worst figure since 1997.

It also reported that the number of 16 to 24-year-olds out of work increased by 28,000 to 943,000, one of the highest figures since records began in 1992, giving a jobless rate of 19.8%.  

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