Bank of England Predicts Two-Year Recession, Unemployment Forecast to Nearly Double

Aside from the breaking news about the massive interest rate rise, the Bank of England’s report today makes for grim reading. The Monetary Policy Committee (MPC) projects a “prolonged period” of recession, with CPI inflation remaining over 10% in the near term. Even taking into account that economic predictions are about as reliable as a long-term weather forecast, the report makes for truly grim reading…

While inflation is expected to fall “sharply” from mid-2023, GDP is expected to decline by around 0.75% during the second half of 2022, and continue to fall throughout 2023 and the first half of 2024. The BBC says this would be the longest recession since records began in the 1920s, albeit not the deepest…

Perhaps most worrying of all for the government, the MPC expects the unemployment rate to rise to just under 6.5% by Q4 of 2025, up from the current 2022 Q4 projection of 3.7%. In real terms this would leave an extra million working brits on the dole. Perfect timing – right around the last possible election date…

mdi-timer 3 November 2022 @ 12:51 3 Nov 2022 @ 12:51 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
UK Unemployment Drops to Near 50-Year Low, Inflation Outpacing Wages

The latest figures from the Office for National Statistics (ONS) shows unemployment dropped to 3.7% in the first quarter of the year, the lowest figure since 1974, with the highest number of job vacancies on record at 1.3 million. For the first time ever, there are now more job vacancies than job seekers…

The figures still paint a mixed picture at best, though. The employment rate sits at 75.7%, 0.1% higher than last quarter, yet 0.9% lower than early 2020, just before the pandemic hit. Excluding bonuses, weekly total pay is also starting to seriously lag behind inflation, with a real terms fall of 1.2% this quarter. Don’t expect that figure to improve much next quarter either…

Half the dead tree press this morning splash with Bank of England Governor Andrew Bailey’s doom laden comments that he can’t control inflation, and the country will soon face “apocalyptic” food prices. Unemployment may be plummeting, yet there’s a recession looming around the corner…

mdi-timer 17 May 2022 @ 09:12 17 May 2022 @ 09:12 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
Unemployment Drops Below Pre-Pandemic Levels, Inflation Wipes Out Pay Rises

New figures from the ONS show unemployment fell to 3.9% between November and January, the lowest since January 2020, and again beyond economists’ expectations. That’s a fall of 0.2% from the last quarter of 2021, with 1.34 million people recorded as unemployed for the three months to January. And despite the wave of panic from Omicron…

Don’t get too happy: while job vacancies are at a record high, wages failed to keep up with the rapidly rising cost of living: salaries grew by 3.8%, while inflation pushed prices up by 5.5% in the same period. Don’t expect those numbers to improve soon.

Speaking this morning, ONS chief economist Grant Fitzner said:

“…the number of people out of work and not looking for a job rose again, meaning total employment remained well below its pre-pandemic level. We have seen yet another record number of job vacancies, and with the redundancy rate falling to a new record low, demand for workers remains strong.”

On wage growth, Fitzner added “The issue is not that pay growth is weak, it’s that prices are running even higher”…

mdi-timer 15 March 2022 @ 09:09 15 Mar 2022 @ 09:09 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
Unemployment Rate Falls to 4.3% Despite End of Furlough

The UK’s unemployment rate fell to 4.3% in October – near pre-pandemic levels – despite the furlough scheme wrapping up at the end of September. The total number of jobs is now 235,000 higher than the pre-Covid level recorded in February 2020. Yet more job-timism…

According to ONS figures released this morning, the number of payrolled employees jumped by 160,000 between September and October, with very few employees losing their jobs or leaving the workforce. Job vacancies have also reached a record high…

The news has prompted fresh claims that the Bank of England is now more likely to raise interest rates to tame inflation, as had previously been expected earlier this month. Yesterday Governor Andrew Bailey claimed that unemployment rates looked “lower than our forecast would imply”, though didn’t confirm the move outright. The Bank will meet to discuss a potential change on 16the December. Guido’s old enough to remember the British Chamber of Commerce claiming one in five firms were planning job cuts ahead of the furlough tapering…

mdi-timer 16 November 2021 @ 08:51 16 Nov 2021 @ 08:51 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
Unemployment Drops to Near Pre-Pandemic Levels

New figures from the ONS show the UK’s unemployment rate is now roughly 4.5%, compared to around 4% before the start of the pandemic – with the majority of industries across the economy seeing notable quarterly growth. Even so, the number of vacancies has also hit a record high, with over 1.1 million jobs available across sectors such as retail and manufacturing. The data shows there are 3.7 vacancies for every 100 employee jobs.

Reacting to the figures this morning, Rishi Sunak said:

The number of expected redundancies remained very low in September, there are more employees on payrolls than ever before and the unemployment rate has fallen for eight months in a row.”

Some good news for the recovery, obviously, although the skill shortages in areas like manufacturing could threaten progress…

UPDATEAn earlier version of this article listed the pre-pandemic unemployment rate at 5%. This has been corrected to 4%.

mdi-timer 12 October 2021 @ 08:45 12 Oct 2021 @ 08:45 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
Unemployment Drops, ONS Says “No Signs” of Post-Furlough Job Cuts

Rishi will be walking with a cautiously optimistic spring in his step this morning, after the ONS announced unemployment has fallen by 182,000 between June and July, with overall figures for workers on payrolls 201,000 lower than pre-pandemic. Two weeks ago the Chamber of Commerce claimed one in five firms was planning to cut jobs as furlough wound down…

Contrary to their pessimism, Jonathan Athow, deputy national statistician for economic statistics at the ONS, said:

“There was no sign of redundancies starting to pick up in our survey data ahead of the furlough scheme beginning to wind down, and Insolvency Service figures for July suggest the same.”

“The world of work continues to rebound robustly from the effects of the pandemic.”

“The number of people on payroll was up again strongly and has now grown over half a million in the past three months, regaining about four-fifths of the fall seen at the start of the pandemic.”

Even more optimistically, Athow took to Twitter to point out there are further optimistic signs, with “high levels of vacancies”, which – if they feed through to more jobs – “should see increased employment in coming months”. He says to wait and see what happens as furlough continues to wind down, though reiterates there are no indications of large-scale planned redundancies “at the moment”…

mdi-timer 17 August 2021 @ 08:26 17 Aug 2021 @ 08:26 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
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