Due to assurances offered by the European Central Bank confidence in the euro-zone has slowly begun to return in recent days and there’s finally some good news for the UK economy too. Well, perhaps not good news… some not awful news.
Reports released today have indicated that in August the amount of British people claiming unemployment benefit fell by the biggest amount for 2 years.
Although analysts participating in a Bloomberg survey had predicted no change, according to data compiled by the Office for National Statistics there were 15,000 fewer jobless benefit claimants in August than in the previous month. July’s figure of a 13,600 reduction in jobless benefit claims was also positively revised. The number of Briton’s in receipt of jobseekers allowance now stands at 1.57 million.
Employment also experienced the biggest increase seen since 2010, rising 236,000 to 29.6 million.
The ONS disclosed that the number of public sector employees dropped to 5.66 million in the second quarter – a decrease of 235,000. However, they did add that the majority of the slump could be attributed to the private reclassification of several educational institutions.
Compared to the previous quarter, the International Labour Organisation recorded that there were 7,000 less people out of work in the three months to July. Economists had forecast that the jobless rate would come in at 8 per cent but the figure actually stood at 8.1 percent, 0.1 per cent lower than in the preceding three month period.
The total amount of people out of work fell to 2.59 million. This figure might be higher than the 2.56 million unemployed confirmed for the April through June period but today’s data releases do illustrate the impressive resilience of the British labour market in difficult economic times.
Recently the results of widespread surveys have implied that despite a continuing negative outlook, businesses and companies are planning to increase their rate of hiring.
Whilst some are clinging to this good news others are finding these latest developments puzzling and concerning. The feeling for many is that the present advancement will not prove sustainable in the long term and that unemployment may well rise in the months to come.
An economist with Deutsche Bank AG, George Buckley, expressed a common view when he said: ‘It’s still a big puzzle why the labour market has been doing so well when the economy has been doing so badly. I think we’ll see some softening in the labour market going forward.
London was responsible for over 5,000 of the plunge in jobless claims which has led some to argue that the Olympics was responsible for creating a temporary surge in employment which will be reversed now that the jobs created by the event no longer exist.
With job cuts still dogging the public sector the government continues to hope that private companies will create enough new positions to restore real balance to the UK job market.
The Pound to Euro exchange rate is currently trading at 1.2463
The Pound to US Dollar exchange rate is currently trading at 1.6115
The Pound to Australian Dollar exchange rate is currently trading at 1.5342
The Euro to US Dollar exchange rate is currently trading at 1.2928
The Euro to Pound exchange rate is currently trading at 0.8020
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