Commenting on the labour market figures published today by the ONS, David Kern, Economic Adviser to the British Chambers of Commerce, said:
"Today's figures convey serious warnings that the economic outlook is worsening. Unemployment is up both in absolute terms and as a percentage of the labour force. Given the expected slowdown in economic growth it seems very likely that unemployment will increase further over the next year. At the same time the figures show that inflationary pressures in the labour market remain muted. Average earning growth was below 4% over the past year, both including and excluding bonuses.
"Against this background, expectations in some quarters that UK interest rates will have to go up soon are unjustified. Any increase in interest rates at this time would be very damaging for the economy. While the MPC must be vigilant about inflation, the threat to growth remains more serious in the near future than the danger of higher inflation. The option of a small cut in interest rates must stay on the MPC's agenda."