Youth unemployment hits record high

Youth unemployment has hit a record high, fanning fears that Britain's young people could become a "lost generation" who cannot find work despite the recession ending a year ago.

The total number of adults under 25 who are out of work moved close to the 1 million mark in the three months to November, rising by 32,000 to 951,000. This pushed the youth unemployment rate up to 20.3%, which is also the highest level since records began in 1992.

There was a particularly sharp rise in the number of 16 and 17-year-olds classed as unemployed, rather than in employment or education, up to 204,000 from 177,000 in the previous quarter.

With the Educational Maintenance Allowance (EMA) being abolished, and the Future Jobs Fund closing in March, analysts fear the youth unemployment crisis will deepen further in the months ahead.

"Britain is now perilously close to seeing 1 million young people struggling to find work," warned Martina Milburn, chief executive of youth charity The Prince's Trust.

"At this time when there is huge pressure on the public purse, government, charities and employers must work together to help young people into jobs and save the state billions," Milburn added.

Brian Johnson, insolvency practitioner at HW Fisher & Company, warned that many companies remain very reluctant to take on new trainees or staff with little experience.

"These are anxious times for many employees and anyone unfortunate to have lost their job but it is also a terrible time for graduates and school leavers entering the jobs market. Over the past few years we have lost businesses and banks and now, before our very eyes, we are losing an entire generation," said Johnson.

Youth unemployment is becoming an increasingly serious global problem, with the number of under-25s out of work worldwide recently estimated at 81 million.

Bob Crow, head of the RMT union, claimed that "a whole generation is being cut adrift on a tidal wave of austerity cuts that will have huge economic and social ramifications well into the future".

Gordon Brown will tomorrow call on world leaders to address this issue, warning of a "timebomb" that could damage both the developed world and emerging economies. The former prime minister is urging the G20 to make youth unemployment a priority.

Claimant count falls

The latest youth unemployment data emerged as the Office for National Statistics reported that the number of people claiming unemployment benefit fell last month.

The claimant count dropped by 4,100 people in December to 1.46 million, and the ONS also revised November's claimant count figure to show a 3,200 decline.

City economists has expected the claimant count to be broadly flat in December, as hiring by private companies was countered by the government's cuts to public spending.

However, the number of people who have been claiming Jobseeker's Allowance for up to six months increased by 7,200 to reach 960,300.

Today's data also showed that the number of people out of work has inched back below the 2.5 million mark. The ILO Labour Force measure showed that 49,000 people lost their jobs in the three months to November. That put the unemployment rate at 7.9%, up from 7.7% in the preceding quarter. The total number of people out of work came in at 2.498m, down from the 2.502m hit last month, but higher than the 2.448m over the June-August period.

Ross Walker of RBS warned that employment showed little signs of recovery, a year after Britain officially emerged from recession.

And Howard Archer of IHS Global Insight cautioned that unemployment is still likely to rise this year, due to lacklustre economic growth and increasing job losses in the public sector.

There were also signs that many people would like to work more than they are able to. The ONS reported that the number of employees and self-employed people who were working part-time because they could not find a full-time job increased by 26,000 in the three months to November, to 1.16 million. This is the highest figure since comparable records began in 1992.

The number of people in employment aged 16 and over fell by 69,000 on the quarter to reach 29.09 million, the ONS said. Today's data also showed that total pay, including bonuses, rose by 2.1% over the last year. This is significantly lower than the rising cost of living, with inflation hitting 3.7% on an annual basis last month.