Testing times for the UK
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Unemployment figures for UK released this week:
Key issues:
- UK unemployment highest under both Claimant Count (1.6 million) and ILO (2.62 million) measure – although it is still lower than the 1992 recession highs, it’s path implies it will exceed the 1992 numbers next year. Especially given the UK growth forecasts are being downgraded to around 1% for next year.
- Unemployment rate is 8.3%
- Youth unemployment has hit a 23 year high of 1.02 million. Big worries about hysteresis and a “lost generation”. Youth unemployment is already higher than the 1992 figures.
- Female unemployment also at a record high – 1.09 million – highest since 1988
- Regional differences: The unemployment rate was highest in the North East, at 11.6% and lowest in the South East at 6.3%.
- Comparisons with other countries: UK Youth unemployment is at 20%; Spain its at 45%; Germany 9%; Greece at 43%
- Interesting to see that the number of self-employed people has hit a record high of 4.09 million
- Whilst the debate on fiscal austerity continues (is the Coalition government cutting too much, too fast?), the argument that this is being driven by the Eurozone woes is weak since whilst the crisis there is causing uncertainty in the UK for sure, the UK unemployment figures have been creeping up for some time now.
- Mervyn King says he thinks the Eurozone debt crisis is “single biggest risk” to the UK – due to the uncertainty to animal spirits / business + consumer sentiment this brings.
Testing times for sure…
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