THE number of people on out-of-work benefits in the south is likely to rise again before the region’s economy is back on track, a Government minister has warned.

Employment Minister Chris Grayling said that he would be “very surprised” if improvements in the dole figures continued without interruption.

He was commenting on statistics showing that 311 fewer people in south Hampshire and the Isle of Wight claimed Jobseeker’s Allowance (JSA) in September, compared with the previous month.

Figures published yesterday by the Office for National Statistics show that 17,536 people in the region claimed JSA last month – including 5,039 in Southampton.

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Every area recorded a monthly fall in claimants except the Isle of Wight, which counted 91 more.

Mr Grayling, speaking ahead of next week’s spending review, which is likely to herald massive cuts to public spending, said that any fall in unemployment was welcome.

But he added: “We are still very acutely aware of the very major economic challenges ahead. We are not on a gradual upwards path, trouble-free. It will be a challenge to get things sorted out and deal with the deficit and I would not want to over-promise on employment prospects.

Big challenges

“I would be very surprised if we saw non-stop improvement with no challenges on the way.

“I’m very clear in saying there are big challenges ahead. We have got to be very cautious – we have a long way to go.”

Mr Grayling said he understood that, with public spending cuts looming, working in the public sector was “deeply unsettling” right now.

He said: “We will do everything we can to avoid pain, but pain cannot be completely avoided.

“We can’t say that nothing in the next few weeks will leave you unhappy.”

business leaders said that next week’s spending review would be key to future employment prospects in the south.

Gill Edinburgh, deputy chief executive of Hampshire Enterprise, said: “With recent reports suggesting the cost of the upcoming spending review to employment levels in the south-east could be over 100,000 jobs, the real test for Hampshire’s economy is still to come.

“Though the picture in Hampshire is one of relative stability, this is no time for complacency.

“The private sector needs to be given the support and freedom to ensure the jobs growth that will lead us to recovery.

“This means reducing regulatory burdens, so small and medium-sized businesses can invest in people and create new jobs.”