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By Lee Wild

Date: Wednesday 16 Jul 2008

LONDON (ShareCast) - Unemployment claims rose at their fastest pace since December 1992 in June as the jobless figure jumped to 1.62m in the three months to May.

The number of people claiming jobseekers’ allowance climbed by 15,500 last month to 840,100, according the Office for National Statistics (ONS), more than the 11,000 predicted.

That makes it the fifth rise in a row and comes as May’s increase of 9,000 was revised up to 14,300.

In the three months to May, some 12,000 more people lost their jobs, sending the total figure up to 1.62m. The unemployment rate stays at 5.2%.

Experts fear things are going to get much worse over the next few months as employers struggle to cover rising fuel costs and weaker economic conditions.

Rising mortgage costs and soaring inflation have caused a huge drop in demand for new houses, prompting Persimmon to slash 1,100 jobs, while both Bovis Homes and Redrow are culling 40% of their workforce. Barratt intends to cut 1,200 jobs and Taylor Wimpey around 900.

On the earnings front, today’s report revealed a welcome dip in annual average earnings growth to 3.8% in May from 3.9% the previous month.

Figures published yesterday put annual inflation at 3.8%, the highest since records began at the start of 1997. One analyst said 5% or more is possible by the end of the year.

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