U.K. unemployment rose to the highest in 16 years in the quarter through November, deepening concerns Britain is heading for another recession as turmoil in the euro area damps the global economic outlook. The unemployment rate based on International Labour Organization methods rose to 8.4 percent, the highest since January 1996, from 8.1 percent in the three months through August, the Office for National Statistics said today in London. The number of people claiming jobless benefits rose for a tenth month to 1.6 million, the highest since January 2010. Ernst & Young LLP’s ITEM Club said on Jan. 16 that Britain has slipped back into a recession and Europe’s inability to end the debt crisis has had a “debilitating effect� on the U.K. While Prime Minister David Cameron is counting on hiring at private companies as his government carries out budget cuts, firms from banks to retailers are cutting jobs as the outlook deteriorates. “Persistent economic weakness, lower business confidence and mounting public-sector cuts are combining to take a serious toll on jobs,� Howard Archer, an economist at IHS Global Insight in London, said before the announcement. “We suspect the economy was essentially stagnant over the fourth quarter of 2011 and expect it to contract in the early months of 2012 before stabilizing towards midyear.� Unemployment measured by ILO methods rose by 118,000 in the three months through November to 2.68 million, the highest since 1994. The number of people in work increased 18,000 to 29.12 million, while the employment rate declined to 70.3 percent from 70.4 percent. Jobless Claims The pound was little changed against the dollar after the data were published. It traded at $1.5345 as of 9:34 a.m., up less than 0.1 percent from yesterday. The data for December show that jobless claims rose less than economists forecast, jumping by 1,200 after a revised increase of 200 in November. Economists had forecast a December increase of 7,000, according to the median of 25 estimates in a Bloomberg News survey. While the economy grew at the fastest pace in a year in the third quarter, the Bank of England has said expansion probably slowed in the three months through December. The central bank is in the final month of a 75 billion-pound ($115 billion) round of bond purchases to boost growth, and economists at Citigroup Inc. and Nomura International Plc expect a further expansion of stimulus next month. Job Cuts Premier Foods Plc (), the maker of Hovis bread, said yesterday it plans to cut 600 jobs, 5 percent of its workforce, in a bid to save 40 million pounds by next year while gift retailer Past Times collapsed with the loss of more than 500 jobs. Today’s report showed that annual pay growth slowed to 1.9 percent in the quarter through November from 2.1 percent in the three months through October, remaining well below the pace of inflation. Weekly pay excluding bonuses accelerated to 1.9 percent from 1.8 percent. Data yesterday showed inflation slowed to 4.2 percent in December, compared with 4.8 percent the previous month. The data also showed that 988,000 workdays were lost in November, the most since 1989. The loss was largely due to a strike that month by public workers protesting government cuts. To contact the reporter on this story: Scott Hamilton in London at shamilton8@bloomberg.net To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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