Number of jobless rises by 3,000

The number of people out of work in the West Midlands in the three months to September has risen by 3,000 to 170,000 - putting unemployment at 6.5%.

Unemployment across the UK has risen to 5.8%, or 1.82 million people, the government has announced.

Economists said unemployment could top two million within months.

Recently, steel giant Corus, Royal Worcester and Spode and engineering firm Precision Antennas have announced job cuts in the West Midlands.

Corus has said 100 jobs will go at eight sites across the West Midlands, while 40 jobs have been axed at Royal Worcester and Spode after the Staffordshire firm went into administration.

'Banking crisis'

Precision Antenna has said 345 jobs will go when it closes its sites in Stratford-upon-Avon, Bidford and Long Marston, South Warwickshire, in 2009.

Roger McKenzie, secretary of the Midlands TUC, said: "We were expecting to see a rise in unemployment this month as trade unions have been dealing with increasing numbers of redundancies.

"Construction, manufacturing and financial services companies are all feeling the effects of the banking crisis."

Katie Teasdale, senior policy adviser for Birmingham Chamber of Commerce and Industry, said the increase was a "hard pill to swallow" for the business community.

'Interest rate cut'

She added: "Businesses are responding to falling demand, low confidence and cash flow difficulties in an acutely challenging economic environment.

"Job losses are no longer confined to construction firms and their supply chain.

"Notably manufacturers and telecommunication firms have recently announced job cuts and, despite last week's massive interest rate cut, it seems that unemployment figures will continue to rise into 2009.

"Government simply must address financing issues for small businesses which are very clearly threatened with their very survival."