Britain: Unemployment reaches 17 year high of 8.4 percent

In some ways, this is the least surprising economic news of the week. Economists had expected the unemployment rate to reach 8.3 percent, a slight tick upwards isn't shocking. Not even the record youth unemployment or the record number of people working part-time because they cannot find full-time jobs seems unusual.

Nor is it surprising to critics of the Conservative-led coalition's austerity program. From the time it was announced back in October 2010 unemployment was predicted to jump.

An estimated 490,000 people were expected to lose their jobs in the public sector and it was always unlikely the private sector would be unable to pick up the slack. Predictably, people worried about their jobs have cut way back on their consumption. Private businesses have been hit hard by lack of consumer confidence.

The unemployment figures came up at today's Prime Minister's Question Time. David Cameron told the House of Commons, "There is not an ounce of complacency in my government" about the jobs crisis.

There better not be as it is certain to get worse before it gets better – much worse. As I blogged here last week, several thousand jobs are to go at RBS, Britain's largest bank, and up to 4,000 will go in Britain's armed services. The independent Office of Budget Responsibility is predicting unemployment will reach 8.7 percent by the end of the year.