UK will be 'hardest hit' by recession
The Bank of England has cut interest rates by 1.5% leaving the base rate at 3%, which is at it's lowest rate since 1955
Britain will be hit hardest by the recession than will the other European leading economies, according to a European Commission report.
This contradicts the UK government statements that Britain is 'well placed' to withstand a recession!
They forecast that unemployment will rise to 2.25 million in 2009.
Only Estonia and Latvia will suffer deeper recessions than Britain in 2009.
The European Commission report suggested that the European Union itself was in, or close to, recession.
UK recession fears
The Government have revealed that the UK economy shrank around 0.5% in the last quarter. This is the first time since 1960 that the UK economy has shrunk.
This fall was more than the market expected and shares took a fall. The pound/dollar exchange rate fell to $1.59.
UK Employment details
There has been a fall in the number of people in employment. In fact the number of unemployed people, the unemployment rate and the claimant count have all increased. The number of inactive people of working age has increased, but the inactivity rate is unchanged. The number of vacancies has fallen.
The employment rate was 74.4% for the three months to August 2008, down 0.4% from the previous quarter and down 0.1% over the year.
However total hours have stayed the same, showing that people on average have a longer working week.
The unemployment rate was 5.7% for the three months to August 2008, up 0.5% from the previous quarter and down 0.4% over the year.
The claimant count was 939,000 which is up 31,800 over the previous quarter and up 103,900 over the year.
The redundancy level was 147,000 which is up 28,000 over the previous quarter and up the same amount over the year.
There were 608,000 job vacancies in the three months to September 2008, which is down 40,000 over the previous quarter and down 62,000 over the year.
If you want to know why there is a difference between the unemployment level and the number of Jobseeker claimants then click here for an explanation
UK Inflation
Consumer Prices Index (CPI) annual inflation – the Government's target measure – was 5.2 per cent in September, up from 4.7 per cent in August.
The largest upward pressure on the CPI annual rate came from the rises in average gas and electricity bills this year compared with falls last year. Price increases in computer games, ticket prices on live music events, foreign holidays, clothing and footwear all helped to push the inflation figure higher.
Amongst those items which came down in prices compared to a year ago are some food including milk. Second-hand car prices, petrol and diesel (!) and private school fees.
Source: Office for National Statistics
