News

UK employment figures expected to improve

The latest data has predicted to show a drop in unemployment and annual earnings growth, with the economy growing strong in the second quarter in the labour market, running close to 3pc.

The figures have shown the economy’s first increase since October 2012.

Although financial markets were stunned after the Office for National Statistics reported that unemployment was 15,000 higher in the three months to May, compared to the quarter ending in February of this year.

Some economists believe the weaker data is a sign of things to come and tougher times ahead for Britain.

Danny Blanchflower, a former member of the Bank of England’s monetary policy committee and a labour market expert has said; “oil prices are falling. Commodity prices are falling. Chinese exports are falling. In the UK, the last labour market data showed unemployment and inactivity both up” [1].

Capital economists have said they thought the rise was a one-off; “after rising in May, we suspect that the headline (three-month average) unemployment rate held steady at 5.6pc in June. Nonetheless, the still-strong business surveys suggest that the unemployment rate is likely to fall further soon” [1].

There have been reports that earnings growth is expected to pick up, alongside the interest rates announcement last week.

It is expected that wage growth will strengthen in the coming months before productivity and the labour market picks up. The UK is overdue its inflation target, which in turn will contribute to these factors rising alongside.

[1]. Larry Elliott, the Guardian. ‘UK employment figures expected to show modest improvement’. http://www.theguardian.com/