UK unemployment fell to 7.8% in the quarter to September, down from 7.9% in the April-June period, according to the Office for National Statistics.

The number of unemployed people increased by 30,000 to 2.46m, the lowest quarterly increase since March-May 2008, while the number of people in employment rose by 6,000 to 28.93m.

Secretary of State for Work and Pensions, Yvette Cooper, says the government is committed to tackling youth unemployment by creating 35,000 new jobs:  “The figures show more people in work and a lot more young people taking up our offer of full-time education and training, which is welcome news.

“The fact that unemployment is significantly lower than everyone forecast at the beginning of the year shows the support for the economy is making a real difference. But we know things are still tough for a lot of families, and unemployment is expected to increase further next year. That’s why we’re determined to do more with an extra 35,000 youth jobs, more apprenticeships and education places so we can guarantee no young person gets stuck in long term unemployment.”

David Frost, director general of the British Chambers of Commerce (BCC), says: “The increase in employment over the last three months highlights the benefits of Britain’s flexible labour market - with firms and workers agreeing measures that have preserved, and even increased, jobs in the economy. There’s no doubt that unemployment will rise further in 2010, but there’s hope that it will peak somewhat below the 3m mark.
 
“Overall, continued uncertainty means that the risks of relapse are still very serious. So measures to sustain the flexibility of our labour market are more critical than ever. We need a moratorium on new employment regulations, coupled with moves to extend quantitative easing and pressure to increase bank lending to viable businesses.”

Carl Gilleard, chief executive of the Association of Graduate Recruiters, says: “Today’s unemployment figures are a major disappointment. We know that there are far fewer graduate vacancies this year and that the situation for graduates is tough. However, it is crucial recent graduates do not lose heart and use any time without employment productively. We know employers continue to place real value on a university degree.
 
“It is still too early to say whether we are likely to see an improvement in 2010 but there is optimism amongst graduate recruiters that the situation should start to ease somewhat. We saw one in four graduate vacancies disappear this year and it will take time before 2008 levels are restored.”
 
Michael Rendell, partner and global leader, human resource services, PwC, adds: “While recent focus has been on bankers’ ethics, it is entirely conceivable that - alongside the innovators and the entrepreneurs - the business stars of the future across all employee levels will also need compliance, risk management and relationship management expertise.

“Organisations need to know who those people are within their operations, to ensure that the way they are rewarded is aligned with business needs and to prepare them for the spotlight.  Compensation systems and appraisal processes will need to evolve to recognise risk, regulatory and relationship competencies as core skills.”