U.K. Unemployment To Ease Only Slowly In Coming Months: Capital Economics U.K.s latest labor market figures suggest that even a fairly robust economic recovery will bring unemployment down only slowly, Capital Economics Chief UK Economist Vicky Redwood said. According to the firm, even if the unemployment rate reaches the 7-percent threshold set by the Bank of England, it might not result in an increase in interest rates. Also, the possibility of inflation returning to its target fairly quickly, amid the weakening pay growth, suggests that a rate-hike remains further away than markets think. Data released by the Office for National Statistics on Wednesday showed that the unemployment rate dropped to 7.7 percent in the August quarter from 7.8 percent in the May-July period. The jobless rate, however, stayed above the 7-percent mark at which the central bank said it would consider raising interest rates. The number of employed persons increased strongly by 155,000 sequentially in the three moths to August, while the number of unemployed persons dropped by just 18,000. The comparatively slower decrease in unemployment was due to a strong increase in the workforce. At the same time, the more timelier claimant count decreased sharply by 42,000 in the September from a month earlier. If the continuing increase in output-per-worker gathers pace in the coming months, the rate of jobs growth could soon slow, Redwood said. The economist further observed that the marked increase in employment during the August quarter is not consistent with the central banks view that the economic recovery will be driven primarily by productivity, rather than employment.
Posted on: Thu, 17 Oct 2013 07:27:06 +0000
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