UK unemployment total rises sharply to 2.51 million

The number of people unemployed in the UK rose by 80,000 to 2.51 million in the three months to July, official figures have shown.

This is the largest increase in nearly two years, the Office for National Statistics (ONS) said. The jobless rate now stands at 7.9%.

Youth unemployment also rose sharply, by 78,000 to 973,000.

The total claiming Jobseeker's Allowance rose by 20,300 in August to 1.58 million.

The number of people in employment in the economy fell in the three months to July, by 69,000 to 29.17 million.

Private sector

"Clearly this is a very unwelcome set of figures. Any increase in unemployment is something we really don't want to see happen," said Employment Minister Chris Grayling.

He said the data would "reinvigorate" the government's "determination" to take steps to get the economy growing and create private sector jobs.

The government is looking to the private sector to offset job losses in the public sector resulting from its wide-ranging programme of spending cuts, designed to reduce the UK's debt levels.

Mr Grayling reiterated the government's determination to continue with its programme of cuts, as the alternative of borrowing more money was not a credible solution.

Analysts said the unemployment figures reflected weak economic growth.

"Today's data provide further evidence that the fading of the UK's economic recovery is having increasingly severe effects on the labour market," said Samuel Tombs at Capital Economics.

"Continued rises in unemployment in the coming months seem likely."

However, some argued that, given the current economic environment, the figures were not as bad as could have been expected.

"The biggest surprise has been the resilience of the labour market given how weak growth has been," said Ross Walker at the Royal Bank of Scotland.

The UK economy grew by 0.2% between April and June.

Wage rises

The total number of unemployed men rose by 39,000 to 1.45 million in the three months to July, while the number of women out of work increased by 41,000 to 1.06 million, the highest figure since the three months to April 1988.

The latest figures for public sector employment show a fall of 110,000 between March and June to 6.04 million. This is the largest fall since comparable records began in 1999.

The number of people employed in the private sector increased by 41,000 to 23.13 million.

The ONS figures also showed that total pay in the three months to July rose by 2.8%. Excluding bonuses, pay climbed by 2.1%.

This figure is watched closely as it shows wage inflation in the economy. One reason the Bank of England has given for keeping interest rates at record lows is that inflationary pressures are largely temporary and external, and are not being exacerbated by rising wages.