Jobless rise points to rate cut soon

HOPES THAT interest rates will fall again this spring were boosted yesterday by figures suggesting that unemployment is starting to creep up. Both the claimant and survey measures of joblessness rose, while the pace of average earnings growth slowed.

The minutes of the Monetary Policy Committee meeting earlier this month, also released yesterday, indicated that it was a question of when, not if, it should cut rates again. The majority view was that "although the direction of interest rates was still more likely than not to be down, there was no urgency this month".

The evidence from the jobs market was mixed, despite the small rise in unemployment. On the one hand the claimant count rose by 4,300 to 1,311,000 in February, and the survey measure of joblessness rose by 37,000 in November to January.

On the other hand, employment climbed by 119,000 in those three months to reach 27,319,000, a new record. The number of people of working age who were "inactive", or out of the workforce, fell by 100,000.

Most of the new jobs created in the latest quarter were part-time and in the service industries. More than 80 per cent of those taking part- time work did not want full-time jobs.

Manufacturing employment fell substantially, however; it dropped by 109,000 to just over four million in the three months to January.

Nor were there any signs of wage pressure. The recently relaunched average earnings index grew by 4.3 per cent in the year to December, compared to 4.5 per cent the previous month.

Andrew Smith, the employment minister, said the figures showed an improvement in the jobs market. Higher levels of economic activity were accompanied by a "welcome moderation" in earnings growth.

But John Monks, TUC general secretary, said there was a very difficult time ahead, especially for manufacturing.

"With wage growth moderating and no sign of inflationary pressures in the economy, the Bank of England must cut interest rates when it meets next month," he said.

The minutes showed that eight of the nine MPC members had voted to leave rates at 5.5 per cent. The ninth, Willem Buiter, voted for a cut of 0.4 percentage points - a degree of precision that bemused analysts.

"The minutes make it clear that the decision to make no change in March was about timing and tactics rather than strategy," said Michael Saunders, an economist at Salomon Smith Barney.

The financial markets have pencilled in another two quarter-point reductions in interest rates this year. Most forecasts predict that unemployment will rise further as growth stalls in the first half of 1999.

"If the economy turns by mid-year, we might see 250,000 more jobs lost," said Neil Parker at Royal Bank of Scotland. "It is no comfort for those quarter of a million, but there would be that many new jobs gained over the following year."

News
In 2006, Pluto was reclassified as a 'dwarf planet'
scienceBut will it be reinstated?
News
Destructive discourse: Jewish boys look at anti-Semitic graffiti sprayed on to the walls of the synagogue in March 2006, near Tel Aviv
news

As anti-Semitic attacks rise, Grant Feller re-evaluates his identity

Arts and Entertainment
Adam Levine plays a butcher who obsessively stalks a woman in Maroon 5's 'Animals' music video
music'Animals' video 'promotes sexual violence against women'
News
people Biographer says cinema’s enduring sex symbol led a secret troubled life
PROMOTED VIDEO
News
newsGlobal index has ranked the quality of life for OAPs - but the UK didn't even make it into the top 10
News
people

Kirstie Allsopp has waded into the female fertility debate again

News
The moon observed in visible light, topography and the GRAIL gravity gradients
science

...and it wasn't caused by an asteroid crash, as first thought

News
people
Life and Style
food and drink

Savoury patisserie is a thing now

News
Researchers say a diet of fatty foods could impede smell abilities
scienceMeasuring the sense may predict a person's lifespan
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
footballArsenal 4 Galatasaray 1: Wenger celebrates 18th anniversary in style
News
news

Meet the primary school where every day is National Poetry Day

News
Gillian Anderson was paid less than her male co-star David Duchovny for three years while she was in the The X-Files until she protested and was given the same salary
people

Gillian Anderson lays into gender disparity in Hollywood

News
peopleStella McCartney apologises over controversial Instagram picture
Life and Style
Laid bare: the Good2Go app ensures people have a chance to make their intentions clear about having sex
techCould Good2Go end disputes about sexual consent - without being a passion-killer?
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Trust Accountant - Kent

NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

Law Costs

Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

Day In a Page

Italian couples fake UK divorce scam on an ‘industrial scale’

Welcome to Maidenhead, the divorce capital of... Italy

A look at the the legal tourists who exploited our liberal dissolution rules
Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

The vintage series has often been criticised for racial stereotyping
An app for the amorous: Could Good2Go end disputes about sexual consent - without being a passion-killer?

An app for the amorous

Could Good2Go end disputes about sexual consent - without being a passion-killer?
Llansanffraid is now Llansantffraid. Welsh town changes its name, but can you spot the difference?

Llansanffraid is now Llansantffraid

Welsh town changes its name, but can you spot the difference?
Charlotte Riley: At the peak of her powers

Charlotte Riley: At the peak of her powers

After a few early missteps with Chekhov, her acting career has taken her to Hollywood. Next up is a role in the BBC’s gangster drama ‘Peaky Blinders’
She's having a laugh: Britain's female comedians have never had it so good

She's having a laugh

Britain's female comedians have never had it so good, says stand-up Natalie Haynes
Sistine Chapel to ‘sing’ with new LED lights designed to bring Michelangelo’s masterpiece out of the shadows

Let there be light

Sistine Chapel to ‘sing’ with new LEDs designed to bring Michelangelo’s masterpiece out of the shadows
Great British Bake Off, semi-final, review: Richard remains the baker to beat

Tensions rise in Bake Off's pastry week

Richard remains the baker to beat as Chetna begins to flake
Paris Fashion Week, spring/summer 2015: Time travel fashion at Louis Vuitton in Paris

A look to the future

It's time travel fashion at Louis Vuitton in Paris
The 10 best bedspreads

The 10 best bedspreads

Before you up the tog count on your duvet, add an extra layer and a room-changing piece to your bed this autumn
Arsenal vs Galatasaray: Five things we learnt from the Emirates

Arsenal vs Galatasaray

Five things we learnt from the Gunners' Champions League victory at the Emirates
Stuart Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

This deal gives England a head-start to prepare for 2019 World Cup, says Chris Hewett
Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

The children orphaned by Ebola...

... then rejected by surviving relatives over fear of infection
Pride: Are censors pandering to homophobia?

Are censors pandering to homophobia?

US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
The magic of roundabouts

Lords of the rings

Just who are the Roundabout Appreciation Society?