Growing Midland jobless figures prompted business leaders to urge the Bank of England to follow the United States’s lead and deliver a further deep cut in interest rates in January.
Unemployment in the region rose by 10.3 per cent to 182,000 in the three months to October, according to new figures from the Office for National Statistics.
On a national level the number of people out of work rose by 137,000 to 1.86 million – the highest level for more than a decade.
And the number of unemployment benefit claimants topped a million for the first time in eight years, with November bringing the biggest monthly growth in dole queues since the spring of 1991.
The gloomy regional and national figures prompted business leaders in the Midlands to urge policy-makers to follow the US Federal Reserve’s dramatic rate cut earlier this week by reducing interest rates in the UK to at least one per cent.
Kiran Virk, Birmingham Chamber of Commerce and Industry (BCI) policy adviser, said a reduction in January was essential to increase confidence across all industry sectors.
She added: “Many companies and their employees are seeking assistance from Job Centre Plus and there are 9,600 vacancies in Birmingham and Solihull. If people who lose their jobs are prepared to re-train, there are opportunities.
“To help business through the current downturn, it’s more important than ever that business look at the skills level of their workforce.”
“The Government has announced new initiatives for their flagship programme Train2Gain, which includes employees being able to study for new skills in a more flexible and business-friendly way. By doing this, companies can ensure they have the skills in their workforce to help them through the downturn and emerge stronger.”
BCI research indicates that manufacturing and service firms decreased their workforces during the fourth quarter of the year but that firms intended to sustain a manageable workforce in order to see out the downturn. Ms Virk added: “Due to the weakening domestic economy, employers are being forced to cut costs, which is reflected in employers’ hiring intentions.
“Over the past few weeks, we have seen key businesses in the region such as Jaguar Land Rover announce shorter working weeks for employees as an alternative to compulsory redundancies to remain operational throughout the downturn.”
Recent weeks have brought ample evidence that the economic downturn is weighing heavily on businesses in the region with a steady stream of firms making redundancies or collapsing into administration, threatening jobs.
Simon Topman, chairman of the West Midlands Chambers, said: “Unemployment across the region is extremely worrying. Given the diversity of industry and commerce a substantial interest rate cut in the New Year will provide a much-needed boost and make the region more competitive.”
Howard Archer, chief UK and European economist at IHS Global Insight, called the national unemployment figures “horrific,” adding he suspected claimant count unemployment will reach two million in the first half of 2010.