Figures from the Office for National Statistics today show the number of unemployed people fell by 3,000 over the quarter to reach 2.46 million.
However, the number of long-term unemployed increased sharply.
The number of people unemployed for more than 12 months increased by 37,000 over the quarter to reach 663,000, the highest figure since the three months to September 1997.
The unemployment rate for October to December 2009 was 7.8 per cent, unchanged on the previous quarter.
The employment rate for October to December 2009 was 72.4 per cent, down 0.1 on the quarter.
The number of people in employment fell by 12,000 on the quarter to reach 28.91 million.
The number of people claiming Jobseeker’s Allowance (the claimant count) increased by 23,500 between December 2009 and January 2010 to reach 1.64 million, the highest figure since April 1997.
Legal & General managing director of general insurance Peter Graham says: “While it is fantastic to see unemployment levels falling, the reality is that unemployment typically lags behind a move out of recession, and so we could see figures still rise over the coming months. However, this improvement could mean we see increased interest in the mortgage market as people start to feel more confident about their employment situation.”
But Graham adds: “Many people will still be struggling to pay their bills, including their mortgage repayments. Recent stats from the Council of Mortgage Lenders highlighted that home repossession in 2009 were the highest it has been since 1995. It is essential that people protect their homes from repossession in the event that they are unable to maintain their monthly repayments. This is where Mortgage Payment Protection Insurance is a safety net that many people will need and one that they should be considering if arranging a mortgage.”