Unemployment has risen in the North East, bringing to an end a run of four successive reductions in the number of people out of work.
The regional rate of 5.2% is the highest in the country and well above the national average of 3.8%, though the number of people claiming unemployment benefit in the region fell slightly to 72,210. Employment in the North East stands at 1.2m, an increase of 5,000 over the past year.
Though only a small increase of 0.2%, the rise in unemployment comes as fears are mounting that the cost-of-living crisis will impact on businesses in the North East. An influential survey this week said business activity in the region had fallen for two months in a row, with the North East recording the weakest economic performance of all UK regions for 10 consecutive months.
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Rhiannon Bearne, director of policy and representation at the North East England Chamber of Commerce, said: “Today’s employment figures once again paint a difficult picture for the North East. The North East continues to have the highest unemployment rate and the lowest employment rate across the UK. We are the only region to have experienced slight decreases in jobs and employment overall from November 2021 to January 2022.
“We remain the region with the highest economic inactivity rate in England – too many people have left our workforce altogether. Closing these gaps is now urgent as the UK faces another challenging economic period. It is vital that the North East, our people and businesses, are not left further behind.”
North East LEP chief executive Helen Golightly said: “The data released today paints a slightly more positive picture than the last month with an additional 10,500 people in employment. We have seen improvement in the employment rate across the country and it’s encouraging to see the North East moving at a slightly quicker rate than the national average in this period.
“Older and younger men and women of all ages were the groups who re-entered the labour market during this quarter.
“We should however approach this month’s data with caution as the labour market remains volatile as the economy faces significant challenges with large increases in inflation and the cost of living continuing to rise. It is likely that these factors will have an impact on the labour market in months to come and we must continue to monitor these changes closely and respond accordingly.”
Nationally, the figures from the Office for National Statistics (ONS) showed that pay levels have fallen behind soaring inflation. Regular wages excluding bonuses plunged by 4.5% in April when taking Consumer Prices Index (CPI) inflation into account - the biggest fall since records began in January 2001.
But in a welcome dose of good news on the economy, the figures showed the number of UK workers on payrolls rose by another 90,000 or 0.3% between April and May to 29.6 million. The national unemployment rate edged up slightly to 3.8% in the three months to April, from 3.7% in the previous three months, though it remained close to 50-year lows.
Job vacancies also rose to a new record of 1.3m despite a further slowdown in the rate of growth, while the redundancies rate to a new low of 2% in the three months to April. Chancellor Rishi Sunak insisted the statistics show Britain’s jobs market “remains robust with redundancies at an all time low”.
But Jonathan Ashworth, Labour’s shadow work and pensions secretary, said: “Work should be the best defence from the rising cost of living yet millions in work are in poverty, real wages are plummeting, the numbers in overall employment are below pre-pandemic levels, and the numbers on out-of-work benefits not looking for work is higher than pre-pandemic.”
He also accused ministers of showing “utter complacency about the huge levels of economic inactivity”.
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