London avoids jobs pain as public-private gap widens

Jobs figures underlined the gulf between the public and private sector today, but London has been spared the axe so far.

Public sector workers fell 22,000 to 6.05 million in the three months to June — on top of a similar slide in the first quarter — led by a 16,000 decline in central Government staff, said the Office for National Statistics.

This was put in the shade by the private sector, which boosted overall employment by 308,000 to 23.1 million in the three months to June.

Public employment overall is 18,000 lower than a year ago, but the capital — which has 782,000 public sector staff — was the only English region to be spared job cuts. Against a year ago, London has added 18,000 jobs in contrast with the rest of the country. The North West was worst hit with 9000 job losses.

Today's figures also showed public sector workers' pay grew 2.7%, compared with 1.2% in the private sector.

Overall unemployment remains high at 2.47 million and the pace of job cuts is set to accelerate, with the Office for Budget Responsibility forecasting 600,000 job losses over the next five years.

ING Bank economist James Knightley said: "With public sector job losses starting to come through and worries about the global outlook perhaps set to dampen private sector employment growth, unemployment is likely to remain stubbornly high."