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U.K. Jobless Rate Holds Steady For Third Month

19.10.16 13:57

LONDON (dpa-AFX) - The U.K. unemployment rate remained unchanged at a near 11-year low in the three months to August, signaling the resilience of the British labor market to the shock 'Brexit' vote in June.

The ILO jobless rate was 4.9 percent, where it has been since the three months to May, data from the Office for National Statistics showed Wednesday. The figure was in line with economists' expectations.

The number of unemployed was 1.66 million, which was 10,000 persons more than the previous three months.

Employment grew by 106,000 persons to 31.81 million. The employment rate was 74.5 percent, the joint highest since comparable records began in 1971, the ONS said.

"These figures show that employment continued to grow over the summer and vacancies remain at high levels, suggesting continuing confidence in the economy," ONS statistician Nick Palmer said.

Average earnings including bonuses grew 2.3 percent year-on-year, in line with economists' expectations, but smaller than July's 2.4 percent rise.

Excluding bonuses too, the increase in earnings was 2.3 percent versus 2.2 percent in July.

The ONS also reported that the number of Britons claiming unemployment benefits rose modestly by 700 persons to 776,400 in September. The increase was well short of the 3,200 economists had predicted.

The claimant count rate was 2.3 percent in September, unchanged from August. Economists had expected the figure to ease to 2.2 percent.

Capital Economics' economist Scott Bowman said August's labor market data showed that the EU referendum still has not provided much of a hit to the jobs recovery.

"But surveys suggest employment growth will slow further in the coming months which should contain wage growth," the economist added.

IHS Global Insight economist Howard Archer also sounded caution on being too upbeat over the latest data, saying that "there are signs of cracks appearing in the UK labor market".

"We suspect both the economy and the labor market will be increasingly pressurized by mounting uncertainties over the coming months - particularly once the government triggers Article 50 (due by end-March) and likely very difficult negotiations with the EU come increasingly to the forefront," Archer said.

"We also expect growth to slow as consumer purchasing power is increasingly squeezed."

Despite the recent run of stronger economic data, the Bank of England is widely expected to ease policy next month. Adding to policymakers' worries, the pound sterling has been volatile and weak and inflation has begun to accelerate.

Several members of the Monetary Policy Committee have already signaled that they are in favor of cutting the key interest rate from its current record-low of 0.25 percent.

The next rate decision announcement is scheduled for November 3.

Copyright RTT News/dpa-AFX



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