UK job­less claims rise as la­bor mar­ket slows

The Pak Banker - - Front Page -

LON­DON

UK job­less claims rose at the fastest pace in more than a year and job cre­ation slowed, sug­gest­ing the la­bor mar­ket is suc­cumb­ing to a frag­ile eco­nomic out­look.

Job­less-ben­e­fit claims rose 10,100 to 1.58 mil­lion in Oc­to­ber, the big­gest in­crease since Septem­ber last year, the Of­fice for Na­tional Sta­tis­tics said to­day in Lon­don. The me­dian of 28 es­ti­mates in a Bloomberg News sur­vey was for no change. Em­ploy­ment based on In­ter­na­tional La­bor Or­ga­ni­za­tion meth­ods rose 100,000 in the three months through Septem­ber, half the pace of the pre­vi­ous pe­riod, as a boost from the Lon­don Olympics be­gan to fade.

Economists pre­dict un­em­ploy­ment will be­gin ris­ing in com­ing months as com­pa­nies re­spond to a weak eco­nomic out­look by freez­ing hir­ing or cut­ting payrolls. Bank of Eng­land Gover­nor Mervyn King will dis­cuss the strength of the econ­omy's re­cov­ery from re­ces­sion as he un­veils new growth and in­fla­tion fore­casts at a press con­fer­ence in Lon­don at 10:30 a.m. to­day.

"Be­cause growth is still quite slug­gish there will be slug­gish em­ploy­ment growth, and the un­em­ploy­ment rate may edge up a bit," said Ross Walker, an econ­o­mist at Royal Bank of Scot­land Group Plc (RBS) in Lon­don. "There's ev­ery in­di­ca­tion for now that pol­icy is on hold, and it's hard to see at this junc­ture why they'd do more quan­ti­ta­tive eas­ing." The pound rose against the dol­lar af­ter the re­port and was trad­ing at $1.5901 as of 9.53 a.m. in Lon­don, up 0.2 per­cent on the day. ILO un­em­ploy­ment be­tween July and Septem­ber fell 49,000 to 2.51 mil­lion, though fig­ures pre­pared on an ex­per­i­men­tal ba­sis showed an in­crease of 53,000 in Septem­ber alone, the sta­tis­tics of­fice said. Long-term un­em­ploy­ment con­tin­ued to rise.

There are "re­ally pos­i­tive signs" in to­day's data, though "I don't think any of us are com­pla­cent about the scale of the chal­lenges that we face," U.K. Em­ploy­ment Min­is­ter Mark Hoban said in an in­ter­view on BBC Tele­vi­sion.

The job­less rate fell to 7.8 per­cent from 7.9 per­cent in the three months through Au­gust. The rise in job­less claims last month left the claims rate at 4.8 per­cent. In Septem­ber, job­less claims rose by 800 in­stead of the 4,000 drop orig­i­nally re­ported. It was the first back-to-back in­crease in claims since June and fol­lowed eight months of de­cline.

In Lon­don, job­less claims rose by 2,900 in Oc­to­ber, sug­gest­ing vol­un­teers and tem­po­rary work­ers hired dur­ing the Olympics are once again look­ing for work.

With eco­nomic out­put no higher than it was a year ago, economists have strug­gled to ex­plain the strength of the la­bor mar­ket. Pos­si­ble rea­sons in­clude an in­crease in part-time work and self-em­ploy­ment. Down­ward pres­sure on wages mean­while is help­ing com­pa­nies avoid the need to shed staff by hold­ing down la­bor costs. Av­er­age earn­ings grew an an­nual 1.8 per­cent in the three months through Septem­ber, com­pared with 1.7pc in the pre­vi­ous pe­riod.

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