Claims for unemployment benefits in the U.K. unexpectedly increased in the first month of the year, raising questions about the strength of the labor market ahead of public spending cuts that will lead to more layoffs, according to Bloomberg. On Wednesday, the Office for National Statistics reported that the number of people in the U.K. receiving unemployment benefits rose by 2,400 in January to 1.46 million, which roughly reversed economists’ forecast for a drop of 3,000. Also, the number of unemployed measured by the International Labour Organization’s methods rose by 44,000 to 2.49 million in the fourth quarter.
The U.K. job market is expected to come increasingly under pressure as the private sector struggles to keep pace with government layoffs as austerity measures take effect. The ILO unemployment rate was seen 0.2% higher in the fourth quarter at 7.9% as employment fell by 68,000 to 29.1 million. According to The Daily Telegraph, the Nationwide index for consumer spending plummeted by 20 points in January to 70, which is the lowest since November 2008 and the sharpest decline in seven years of record. The sub-indices for major purchases and expectations showed deteriorating confidence in the country’s economic outlook, and the current conditions gauge also dropped, but only slightly.
Click here to read the story on unemployment claims from Bloomberg News.
Click here for coverage of consumer confidence from The Daily Telegraph.