London, Nov 12, IRNA, Unemployment in Britain has reached its highest level since Labour came to power 11-years ago in 1997, according to the latest official figures.
The Office for National Statistics reported Wednesday that 1.82 million people were out of work during the three months until September, an increase of 140,000 over the previous quarter.
The number of people claiming jobseekers allowance rose by 36,500 last month to 980,900, the highest figure since the spring of 2001 and the worst monthly increase since 1992.
The latest negative figures coincided with Bank of England governor Mervyn King warning that the recession in Britain will be deeper and longer than expected, admitting there was a risk of the economy suffering deflation during the next two years.
In a dramatic change of its forecasts three months ago, the Bank predicted that the UK economy would shrink by 2 per cent in the first half of next year and would not return to growth until towards the end of 2009.
“The world has changed since August, and so we have changed our forecasts. We have seen the biggest banking crisis since the outbreak of the first World War, and arguably bigger than that,” King said.
In its gloomy assessment, the bank also forecast that inflation, currently at 5.2 per cent, would fall to just below 1 per cent in two years if interest rates stayed at the current level of 3 per cent, following two recent cuts totalling 2 per cent.
Following the release of the report, the pound fell to six-year low against the dollar, dropping to Dlrs 1.5204, compared with it hitting Dlrs 2 around a year ago.