Smaller rise in unemployment – Bank sees some hopeful signs

Unemployment continued to rise, as expected, though there was rather less of a horror story for the claimant count, which rose by 73,700 in March (to 1.46m), after February’s record increase of 136,600. Monthly figures are volatile but the February increase is probably the biggest we will see in this cycle. The Labour Force Survey measure increased by 177,000 over the three months to February, hitting 2.1m and suggesting the trend rise in unemployment is around 60,000 a month.

Earnings growth reflected the bonfire of the bonuses, up just 0.1% in the three months to February compared with a year earlier. Excluding bonuses, the rise was 3.2%. More details here.

Meanwhile, the Bank of England’s April minutes detected one or two signs of optimism in the data which suggested that the pace of decline might ease in the second quarter, but agreed to persist with the programme of quantitative easing. There were signs of modestly better conditions in corporate bond and commercial paper markets, it said. The minutes are here.

Other pre-budget data included slightly stronger mortgage lending from the Council of Mortgage Lenders), though still down more than 50% on a year ago, and the March public finances. These confirmed public sector net borrowing in 2008-9 at £90 billion, £12 billion more than the chancellor predicted in November. It could have been worse. There will be much more on the public finances later. The latest figures are summarised here.

Originally published at About David Smith’s and reproduced here with the author’s permission.