Wednesday, January 21, 2009
Unemployment up, clear vote for rate cut
Posted by David Smith at 10:00 AM
Category: Thoughts and responses

Claimant unemployment rose by 77,900 to 1.16m last month, close to the consensus expectation of an 80,000 rise, though given the spate of gloomy news nobody would have been surprised by 100,000. The rise in the Labour Force Survey measure was 131,000 in the three months to November to 1.923m, or 6.1% of the workforce. It was accompanied by a drop in employment of 26,000. Neither number was as bad as it might have been though this was before the real winter woes kicked in. Here are the details.

The Bank of England, meanwhile, voted 8-1 to cut Bank rate from 2% to 1.5% earlier this month, with the one vote against being David "Danny" Blanchflower, who preferred a full-point reduction. The minutes are here.

Finally, data for the public finances for December were very weak, with a current budget deficit of 11.4 billion and net borrowing of 14.9 billion. On the face of it, even the chancellor's November forecasts will be badly missed. The public finances normally improve in the final three months of the fiscal year. They need to. More here.