New data shows a 23 per cent rise in unemployment in the West Midlands – and business leaders are warning the number of people out of work will continue to rise.
Job cuts at LDV and Lloyds TSB in Birmingham contributed to a 52,000 rise in unemployment, to 276,000, in the three months to May.
The unemployment rate in the region now stands at 10.3 per cent – more than anywhere else in the UK.
The second highest is the North East with a 9.2 per cent rise to 115,000, less than half the number out of work in the West Midlands.
Birmingham Chamber of Commerce and Industry president Bridget Blow said: “These figures emphasise the extremely difficult economic conditions that employers are currently facing.
“In the last three months, 800 people were made redundant at LDV and many other small and medium-sized firms found the only solution to the tough trading conditions was to cut staff.
“Our research indicated that the manufacturing sector has particularly struggled with nearly half of all respondents reporting their workforce had declined over the last three months, in line with the national manufacturing trends.
“The figures will increase when this year’s graduates leave university this summer and youth unemployment nationally continues to rise - now at 726,000, up by 95,000 in the last quarter.”
Nationwide, the jobless total rose by 281,000 in the three-month period, the biggest quarterly increase on record, taking the total to 2.38 million, the highest since 1995.
The number of people claiming jobseeker’s allowance increased by 23,800 in June to 1.56 million, the worst total since Labour came to power in 1997 while the number of people in work fell by 269,000 in the last quarter to 29 million.
Simon Topman, chairman of the West Midlands Chambers of Commerce, said “everything possible” was being done in the West Midlands to help graduates get into work.
He said: “Our region is the first in the country to set up and offer subsidised jobs and training places to graduates with local companies - offering a real opportunity to the 52,000 graduates who are expected to leave the region’s universities in the next few weeks.”
The South East, Yorkshire and Humber regions also suffered dramatic rises in unemployment with London posting the highest jobless total in the UK.
The number of people classed as economically inactive, including those on long term sick leave or who have given up looking for a job, increased by 64,000 in the latest quarter to 7.92 million, 20 per cent of the workforce.
The nation’s youngsters have also suffered as a result of the economic downturn with youth unemployment rising to 726,000, up from 631,000 in the last quarter.
Employment Minister Jim Knight said: “Figures show that many in the UK are suffering the effects of the global recession. But there are signs that our actions to help the unemployed are starting to work.
“We have a lower unemployment rate than the United States, Germany and France. Through investing now in more staff, more training and working with local employers, fewer people are getting stuck on benefits for months and years.
“The active welfare state is working.”