Encouraging Job Figures Provide New Hope For The Economy
15 August 2012 in Chamber News
• In the three months to June 2012, unemployment fell by 46,000 compared with the previous quarter, while employment increased by 201,000
• Youth unemployment fell by 4,000 over the quarter, but remains above 1m
• The number of people working part time because they could not find a full time job reached a new record high
Commenting on the labour market figures for June published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:“The latest job market figures are encouraging, and act as a welcome contrast to recent pessimism about the UK economy. Employment is up, unemployment is down, and the rate of inactivity is at its lowest since 1991.
“But there are still areas of concern. Youth unemployment is unacceptably high, and too many people are still being forced to work part-time as they cannot find a full-time job. While unemployment is likely to increase over the next 12-18 months, the peak may now be lower than the 2.9m figure we predicted in our last forecast.
“Overall, these figures show positive trends in the UK labour market and are difficult to reconcile with other ONS figures, which show three consecutive GDP declines since the end of 2011. If both sets of figures are correct, they imply large declines in productivity, which seems implausible. It is my belief that this could lead to revisions to the GDP statistics in due course.
“Regardless, it is clear is that growth in the UK economy is still too weak. Problems in the eurozone and tough austerity measures will continue to exert downward pressures on domestic demand. The government must build on these positive job figures by considering policies that help businesses deliver growth. This would include more deregulation, an increase in infrastructure spending, and crucially, the creation of a state-backed business bank.”