UK unemployment rate up

The UK is not in the best health at the moment. The latest statistics show the sorrow state of the UK economy as the unemployment rate has risen to a 16 year high. Since December the number of unemployed has risen by 48,000 to 2.67 million. This is an unemployment rate of 8.4%. The equivalent rate in the European Union is well over 10% at the moment, so the UK is still performing better than most European countries.

The number of redundancies is rising as well. In the last quarter of the year 164,000 employees were made redundant. This is up 17,000 compared to the third quarter.

On the other hand the employment level rose at the same time by 60,000 to 29 million, which was mainly caused by a stark rise (90,000) in part time workers. There are now 6.6 million part time employees in the UK. A large part of these part timers are probably people who have accepted fewer and more flexible hours in order to keep working.

The number of vacancies increased as well by 11,000 to 476,000, but compared to the same period last year the number was down by 21,000.

The UK government said that the economy is stabilising, despite continuing economic problems. Lord Freud, the Minister for Welfare Reform said: “The latest figures show some encouraging signs of stability despite the challenging economic climate. With more people in employment and a rise in vacancies, it is clear the private sector is still creating jobs. However we are not complacent. With more people in the labour market we know that competition for those jobs is tough and we will continue to make it our priority to find people work.”

Whilst the government might do a bit of doublespeak, reality is that employers appear to be taking a ‘wait and see’ approach to the labour market and have started cutting  their workforces. This will lead to deflationary pressure on the economy, reduced domestic demand and more misery to come. The already existing North-South divide in the UK is widening even further as a result, as many manufacturing jobs are being cut.

Politicians and union officials will want you to believe that spending more will be the best way out of this crisis, but history has shown that the only way out of the mess is to restructure the economy so that the UK economy is able to compete with other countries again. This won’t be a smooth and pain free process. The Greeks can vouch for that.

The European economy as a whole has become too bloated, too riddled with red tape imposed by bureaucrats in Brussels. In order to be able to grow again, Europe will need to reform itself and become competitive again.

Trying to protect itself as with the current ‘free trade’ treaty with India, is not the best way forward. This will only protect certain industries and devastate some industries in India through forced lack of competition. Europe needs innovation and a culture of risk taking in order to grow, not a confirmation of the status quo!. Many of today’s new technologies were invented in Europe, but thanks to a lack of a forward thinking culture, were ‘matured’ outside the EU.

Europe needs to rethink itself!

 

 

 

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