The number of people seeking jobless benefits rose for the ninth month in a row in October, the Office for National Statistics (ONS) figures showed on Wednesday. It is the longest run since December 1992.
Claimant count had risen 12,100 to 890,100 in October, which is the biggest increase registered since May. This figure beat City expectations of a gain of 5,000.
The figures suggest a job market which is weakening. Higher inflation in recent months does not seem to be feeding into wage growth. It has strengthened expectations that the Bank of England would have to slash interest rates further from 4.5 percent.
Figures released by the ONS on Tuesday showed that the annual rate of inflation fell to 2.3 per cent last month from a record high of 2.5 per cent in September.
Howard Archer of the consultancy Global Insight said: “Further muted earnings growth in September adds to this week's series of reassuring news on inflation, and boosts the case for another interest rate cut early in 2006.”
This sentiment is echoed by Philip Shaw, chief economist at Investec. He said: “This trend of a weakening labour market supports the view that interest rates will be coming down in the first half of next year.”
The overall jobs market seems healthy with total employment climbing by 123,000 over the three months ending September, which is the biggest rise since December 2004 and February 2005. However, the jobless rate over the quarter continues to remain at 4.7%.
Job vacancies also fell to 597,100 in October from 602,700 in the earlier month, which is the lowest in nearly two years.
According to ONS, growth in average earnings also slipped. It increased by 4.1% in September down from 4.2% in August.
Posted
on : Wed, 16 Nov 2005 13:25 GMT | General News
By : Anne Philips
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