Jobs suffer as interest rates rise

Unemployment is at its highest for six and a half years. Under the Labour Force Survey (LFS) count it was up by 92,000 to 1.68 million in the three months to June compared with the previous quarter, which means an unemployment rate of 5.5%.

The LFS count is the government's preferred measure and includes people not eligible for benefits.

Meanwhile the claimant count is now at its highest for four and a half years. Under this count, which only includes those drawing Jobseeker's Allowance, unemployment rose by 2,000 to 957,000 in July from 955,000 in June.

The manufacturing sector continues to lose jobs, with 103,000 fewer jobs in the second quarter of the year compared with a year earlier. They now number just 3.04 million.

TUC deputy general secretary Frances O'Grady has called for long-term measures to protect the sector. She added: "When the Bank of England meets next month, it must resist the temptation to increase interest rates."

However, in voting by 6-1 to raise interest rates to 4.75%, the Bank of England Monetary Policy Committee said that firm economic growth and limited spare capacity in the economy were a threat to inflation. And with the CPI still above its 2% target in July it would seem interest rates will have to rise further.