2006-01-18

Money & Stats: "Economically Inactive" People at All Time High

The number of people out of work in the UK rose by 111_000 to a three-year high of 1.53_million in the three months to 2005-11, official figures have shown. The rise was the biggest for 12 years and lifted the unemployment rate to 5 per cent . 'The Office for National Statistics' ('The ONS') figures also showed that the number of job vacancies fell 12_700 in the period to 606_500. Meanwhile, the number of people out of work and claiming benefit rose by 7_200 to 909_100 last month, 2005-12. The manufacturing sector continued to suffer, 'The ONS' figures showed, with 109_000 jobs in the sector lost over the three-month period. 'The ONS' figures also revealed that the number of people classed as 'economically inactive' rose to its highest level since records began in 1971. The figure -- which includes students, people looking after relatives and those who have given up looking for a job -- rose 25_000 during the three months to 2005-11 to 7.94_million. 'The ONS' data also revealed that average earnings grew by 3.4 per cent in the year to 2005-11, down from the 3.6 per cent rate recorded the month before. Rate cut soon? Analysts said the news was likely to increase the likelihood of a rate cut in coming months as it followed a fall in inflation and signs of a slowdown in consumer spending.
'The UK labour market is showing the first genuine signs of weakening, as employment is now falling, unemployment is rising and wage growth slows,' said The UK economist at HSBC Mr.John Butler. 'This set of data support our view that the next move in interest rates will eventually be down.'
However, while analysts expect 'The Bank of England' to cut rates, they are unsure as to the timing of such a move.
'There is some uncertainty over whether rates will be brought down as soon as 2006-02, but we would not be at all surprised if it happens,' said Investec Chief Economist Mr.Philip Shaw.
'Jobless total at three-year high', BBC News, 2006/01/18 15:20:34 GMT

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