UK Unemployment Falls But Pay Lags Below Inflation
LONDON (AP) â¿¿ Britain's weak economy may shrink in the last three months of the year and growth will remain sluggish into 2013, the governor of the Bank of England warned Wednesday.
The U.K. central bank's warning came after the country's gross domestic product on annual basis unexpectedly grew by 1 percent in the third quarter, ending a nine-month recession.
"Welcome as that is, it is not a reliable guide to the future," Governor Mervyn King said at a news conference introducing the Bank's quarterly Inflation Report."Output growth is likely to fall back sharply in Q4 as the boost from the Olympics in the summer is reversed - indeed output may shrink a little this quarter.," King said. The bank also lowered its GDP growth forecast for 2013 to about 1 percent. "We face the rather unappealing combination of a subdued recovery with inflation remaining above target for a while," the governor added. King said the Bank "has not lost faith" in quantitative easing, the economic stimulus program of asset purchases which has pumped 375 billion pounds ($595 billion) into the British economy since 2009. The growth spurt in the third quarter and the persistence of inflation above the official 2 percent target led the Bank's Monetary Policy Committee to decide against any increase in QE this month. Despite the recent recession, the Office for National Statistics said Wednesday that that the U.K. unemployment rate fell to 7.8 percent in the July-September period, down from 8.0 percent in the previous three months and from 8.2 percent in the year-earlier period. However, there was an increase of 10,000 in the number of people claiming unemployment benefits in the month of September. Martin Beck, an analyst at Capital Economics, says that may signal that the job market is starting to weaken again.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV