British jobless up most in two years

UK unemployment rose to the highest level in almost two years in September as the prospect of a recession and the global financial crisis prompted a spate of job cuts from banks to construction companies.

Claims for jobless benefits rose 31,800 to 939,900, the highest since November 2006, the Office for National Statistics said yesterday in London. Economists predicted an increase of 36,000, according to the median of 30 forecasts in a Bloomberg News survey. The increase for August was 35,700, the most since 1992.

Rising unemployment may hurt Prime Minister Gordon Brown's efforts to maintain his political revival after he won plaudits for his plan to restore confidence the banking system. Banks will cut staff in London, the engine of the UK's economy over the past decade, and Bank of England policymaker Andrew Sentance says Britain may already be in recession.