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UK unemployment reaches 2.51m

The number of unemployed in the UK rose by 53,000 to 2.51 million during the last three months to March, figures from the Office of National Statistics show – the highest level since December 1994.

The total number of people claiming unemployment benefit however fell in April by 27,100 to 1.52 million.

Eric Stoclet, managing director of Crown Mortgage Management, says: “The number of people out of work has grown to the highest level in over fifteen years and shows little sign of improvement. At some point, it is likely to negatively impact the level of arrears and repossessions.

“The MPC’s decision to keep the base rate at its historic low has boosted the ability of homeowners to meet their mortgage payments by keeping the cost of borrowing low.

“Given the increase in inflation and in the country’s debt it is reasonable to ask how long that will last.”

He says the consequent rise in mortgage rates will put severe financial strain on households in an anaemic economy.

He says: “The new coalition has agreed to begin efforts to cut the budget deficit sooner rather than later. The government is likely to wield the axe in the public sector and, clearly, rising unemployment means more people face difficulties in paying their bills and mortgages.

” There are big challenges ahead and lenders and servicers will have to continue to work with borrowers to identify financial difficulties as they arise in order to mitigate this threat.”

 

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