THERE have been calls for action to stem the tide of job losses in the manufacturing sector after a surprise rise in unemployment figures.

The biggest monthly increase for a decade in the number of people claiming benefit also led economists to reduce the odds on a cut in interest rates.

City analysts were surprised by the scale of the rise.

The number of people claiming Jobseekers' All-owance in May rose by 9,700 on the previous month to 950,800, while the total unemployment figure for the three months to April was 1,495,000, up by 36,000 on the previous quarter.

With annual earnings growth also decreasing from 3.4 per cent in March, to 3.2 per cent in April, the figures raised fears of a consumer spending slowdown which could lead the Bank of England to cut interest rates next month, experts said.

Jobless numbers in the North-East fell by 1,000 to 73,000. Yorkshire and Humberside saw 15,000 more people out of work.

* Unemployed people in the Monkchester ward of Newcastle are to benefit from a £3m pilot programme.

The employment rate in Newcastle is 65.5 per cent, compared to the national rate of nearly 75 per cent.