Fall In UK Unemployment By 61,000
Government figures for UK unemployment have revealed a drop by 61,000 in the last three months of 2007. Unemployment is currently estimated to stand at 1.61 million.
In conjunction with these figures the Office for National Statistics (ONS) confirmed that the number of people claiming jobseeker's allowance was also down, falling by 10,800 to 794,600 in January. However, average earnings rose at an annual rate of just 3.8%, which was down slightly from last November.
At a time when the UK economy is slowing down and following the Bank of England's decision last week to cut the interest rates a second time to 5.25% from 5.5%, the employment market appears to remain strong. Or at least that is what the figures are showing for now.
Economists remind us that any change in economic direction does in fact take time before it is reflected in any official figures.
Vicky Redwood, economist at Capital Economics said, "The data shows that the slowing economy has not yet affected the labour market. Normally it takes about 6 months to feed through."
She added, "The Bank of England will be comforted by the fact that pay growth is subdued. But inflation is set to rise sharply and could very well have a knock-on effect on wage demands."
The Bank of England's Monetary Policy Committee (MPC) is faced with the difficult task of ensuring that inflation is kept under control and rates are kept sufficiently low to stimulate the economic downturn. The inflation target is set at 2%; however, Mervyn King, Governor of the Bank of England, has warned that over the course of 2008 inflation may well rise 1 percentage point above target.
Recent figures have already shown that rising prices of fuel and food have pushed UK inflation up in January. Consumer Prices Index (CPI) inflation was also up from 2.1% to 2.2% in December.
Although the Bank of England cut interest rates by a quarter point last week, it is believed any further cuts will depend on whether or not the Bank can keep inflation under control.
Published on February 14, 2008
Digg | 
del.icio.us | 
StumbleUpon | 
Reddit | 
Yahoo! | 
My favourites
Latest Finance Articles
Darling's Budget Report Highlights
Chancellor Alistair Darling delivers his first Budget Report yesterday. Highlighted in this article are some of the main points... Read More
March 13, 2008
Lending Falls Again Says CML
The amounts borrowed by first-time buyers and home movers continue to drop as the credit crunch takes further grip on the UK mortgage market. Remortgage activity is on the increase as many switch from fixed-rate deals to tracker mortgages in anticipation of further base rate decreases from the Bank of England... Read More
March 12, 2008
10 Tips To Improve Your Credit
Now more than ever our credit rating affects our ability to borrow credit. Here are 10 tips to help you improve your credit score... Read More
March 7, 2008
Interest Rates Kept At 5.25%
Yesterday, 6th March, the MPC decided to keep the base rate at 5.25 per cent. This decision was to be expected as the Bank focuses on the pressures of rising inflation and a slowing economy. Analysts are predicting another cut to 5 per cent to happen in May unless economic conditions weaken substantially. Whilst some feel the MPC shouldn't wait too long before the next cut, many agree with yesterday's decision... Read More
March 7, 2008
20 Per Cent Of Homeowners Fear Repayments
The UK's financial watchdog, the FSA, published a survey of over 500 mortgage holders which revealed 1 in 5 are worried about being unable to keep up with their mortgage repayments. It is estimated that 1.4 million fixed-rate or discount deals will expire this year raising monthly repayment amounts. Twenty five per cent of those surveyed admitted they had no contingency plans to meet these costs... Read More
March 6, 2008
Refer a Friend
Why not tell a friend about Money Outlet? Click here
