UK unemployment: challenge for Carney as jobless rate expected to fall

Falling unemployment has raised speculation the Bank of England could alter or abandon its forward guidance policy

Britain's unemployment rate is expected to have come down again when official data are released on Wednesday morning, bringing cheer to the government but a challenge to the Bank of England.

Economists forecast the jobless rate edged down to 7.3% in the three months to November from 7.4% in the three months to October, according to a Reuters poll.

That would be the lowest rate for more than four-and-a-half years and continues the trend of unemployment falling faster than BoE policymakers had been expecting. That has raised speculation the Bank will alter, or even abandon, its forward guidance policy, under which it vows not to consider an interest rate rise until unemployment has fallen to 7%.

The improving headline figures on the labour market from the Office for National Statistics echo business surveys indicating many firms are more optimistic about hiring now the recovery is picking up pace.

"We believe that it should be very easy for the unemployment rate to fall to 7.3% in this week's November reading and more likely will fall to 7.2%," says Alan Clarke, economist at Scotiabank.

James Knightley at ING said the labour market data was likely to show "broad strength".

"The UK has created nearly 1.3 million jobs since the nadir of the labour market in early 2010, 250,000 of them in the past three months alone. Initially they were largely part-time jobs focused in London and the south-east, but increasingly they are full-time positions and located all around the country," he said.

The latest manufacturing sector survey from the CBI on Tuesday showed a bigger proportion of companies expect to lift their employment over the coming quarter. Howard Archer, economist at IHS Global Insight, said that "fuels belief that the unemployment rate could very well get down to the critical 7% threshold level, under which the Bank of England could raise interest rates, by the middle of this year".

But not everyone believes the jobs recovery is evenly spread across the UK. The TUC trade unions group this week said the recent pickup in jobs had failed to reach the north-east, the north-west, Wales and the south-west, leaving them in the same situation or worse at providing jobs than they were 20 years ago.

At the same time, although employment has picked up, wage rises have remained on average below inflation, meaning many workers are worse off in real terms.

Economists forecast Wednesday's data will show annual average earnings growth of 1% for November, excluding bonuses. That marks an increase from 0.8% growth in October but is still well below inflation which came in at 2% for December.

At the same time as the unemployment data, the Bank of England releases the minutes to its latest policy meeting. Policymakers held rates at their record low of 0.5% at the meeting but economists think there was probably a discussion among members of the monetary policy committee (MPC) as to whether the unemployment threshold should be lowered.

Samuel Tombs at the thinktank Capital Economics said: "Some of the more hawkish members might be in favour of sticking to the original guidance. But we suspect that a majority will have begun to consider how they could alter their guidance in order to get market interest rates and sterling down from present levels that, if left unchecked, could soon begin to take some of the pace out of the recovery. Indeed, we believe that there is a strong chance that the MPC will lower the unemployment threshold next month to coincide with the Inflation Report."

Some economists say it is time to move on from forward guidance.

Rob Wood, chief UK economist at Berenberg bank, says the Bank should "let forward guidance wither" and return to targeting inflation.

"When the BoE introduced forward guidance just six months ago, they saw only a 50% chance that unemployment would fall to 7% by mid-2016. That is now likely in the next few months," he said.

"Lowering the unemployment threshold would unnecessarily tether the BoE to a dangerously low target. A rate rise is not needed now, but it will be needed before unemployment gets to 6.5%."

Azure Global’s vision is to be widely recognized as a reputed firm of financial business advisors, achieving real growth for ambitious companies and to become the first choice for F&A outsourcing for accountancy practices and businesses alike for more info visit our site Azure Global and join us also On Facebook

UK economy: Unemployment figures explained by ONS

The answers lie with the Labour Force Survey, the huge continuous survey that ONS uses to measure unemployment (along with employment and economic inactivity).

The unemployment figures use an internationally-agreed definition.

To count as unemployed, people have to say they are not working, are available for work and have either looked for work in the past four weeks or are waiting to start a new job they have already obtained. Someone who is out of work but doesn't meet these criteria counts as "economically inactive".

Each quarter the LFS covers 100,000 people in 40,000 households chosen randomly by postcode. That's about one in 600 of the total population.

The results are then weighted to give an estimate that reflects the entire population. Our survey has a very large sample size compared, for example, with opinion polls, which often sample around 1,000 people

Even so, in any survey there is always a margin of uncertainty, in this case around plus or minus 3% for the unemployment level.People sometimes ask why ONS doesn't increase the sample size to give monthly figures.Put simply, it's a matter of resources. Surveys on this scale take a great deal of work. The cost of doing it on a monthly basis was estimated as at least £7 million a year back in the mid-1990s. So a rolling three-monthly survey remains the best solution for efficiently producing accurate yet manageable data.Obviously it's possible to look at the number of people unemployed, for example, in January-March and compare that with the February-April figure to see what the change is. But it wouldn't be a good idea: the February and March data are in both sides of the comparison, so effectively you're looking at January compared with April.Quite apart from the smaller sample involved, the sample frame wasn't really designed for a monthly survey.Prior to 1998, the LFS results were only published once a quarter, and the sample frame was designed around this. The country was divided into 212 interviewer areas, each of which is subdivided into 13 weekly 'stints', each randomly allocated across one of the 13 weeks of the quarter.So while this means that across the entire three months we can be sure that the sample in each interviewer area is representative of the area as a whole, we would not necessarily expect it to be so with just one month's worth of interviews.ONS has in fact been publishing some single-month LFS employment, unemployment and inactivity estimates on our website since 2004.We did this in response to user requests for more information about the reasons behind movements in the three-month rolling figures. However, the monthly series are more volatile than the three-month ones - for the reasons noted - and so these are not of the quality to be designated National Statistics.The other measure of joblessness - the claimant count - is published for each single month. It doesn't suffer from the limitations of sample size and sampling frame, because it derives from the numbers of Jobseeker's Allowance (JSA) claimants recorded by Jobcentre Plus, so a monthly figure is possible right down to local level.But because many people who are out of work won't be eligible for JSA, it's a narrower measure than unemployment, typically about 1.5 million people recently, compared with about 2.5 million for unemployment.Azure Global’s vision is to be widely recognized as a reputed firm of financial business advisors, achieving real growth for ambitious companies and to become the first choice for F&A outsourcing for accountancy practices and businesses alike for more info visit our site Azure Global and join us also On Facebook

UK construction sector growth remains strong, survey says

Growth in the UK's construction sector remained strong in December, a survey suggests, with work on commercial projects seeing a sharp rise.

The latest Markit/CIPS purchasing managers' index (PMI) for the sector recorded a level of 62.1 last month.

While this was below November's six-year high of 62.6, it was still well above the 50 level that marks the divide between growth and contraction.

On Thursday, the PMI manufacturing survey also showed strong growth.

Wider recovery

Markit said the latest survey indicated that the construction industry had now seen output grow for eight months in row.

House building remains the fastest growing area of construction last month, although the pace of growth has slowed slightly from November.

However, Markit said that the construction sector was now seeing a broader recovery, with commercial building work rising at the fastest pace since August 2007.

The industry has also seen jobs increase for seven months in a row.

"The improving UK economic outlook is helping boost private sector spending patterns, meaning that the construction recovery has started to broaden out from housing demand and infrastructure projects to include strong growth in commercial building work," said Tim Moore, senior economist at Markit.

The survey is further evidence that the UK's economic recovery is continuing.

On Thursday, Markit said that its PMI survey for manufacturing in December showed the sector's recovery remained "on track". The PMI survey for the services sector is due to be released on Monday.

Azure Global’s vision is to be widely recognized as a reputed firm of financial business advisors, achieving real growth for ambitious companies and to become the first choice for F&A outsourcing for accountancy practices and businesses alike for more info visit our site Azure Global and join us also On Facebook

Wage rises outpaced by inflation for fifth year running, official data shows

The average pay rise improved to 2.2% – from 1.5% a year earlier – but still failed to match inflation at 2.4%
Wage rises failed to keep pace with inflation for a fifth successive year, according to official figures that show a recovery in pay in the year to April 2013.

Average pay rises jumped to 2.2% from the previous year's total of 1.5%, but the recovery still left workers worse off after prices rose by an average 2.4%.

Much of the rise in wages was distorted by City bankers and other well-paid staff delaying salary rises and bonus payments to take advantage of the cut in the top rate of tax from 50p to 45p in the £1.

The decision of people earning more than £150,000 to wait for a change in the tax rate before taking some of their pay could account for much of the failure of average pay to recover during 2012.

The Office for National Statistics said median average annual earnings before tax for full-time employees, where workers were in the same job for at least a year, was £27,000. This was an increase of 2.1% compared with £26,500 in the year ending 5 April 2012.

Median gross annual earnings for men were £29,300, up 1.9% from 2012, and for women were £23,600, up 2.2%. But despite the higher pay rises for women, the pay gap between women and men widened from 9.5% to 10%.

More women work in part-time jobs than men and much of the recovery in employment until the spring this year was in part-time work, probably leading to a lower gross figure. Low pay remains a feature of British working life, according to the figures.

The ONS found there were 203,000 jobs held by over-21s with pay less than the national minimum wage, in breach of low pay rules.

Azure Global’s vision is to be widely recognized as a reputed firm of financial business advisors, achieving real growth for ambitious companies and to become the first choice for F&A outsourcing for accountancy practices and businesses alike and if u want to Setup ur business in United Kingdom then  its not difficult in this modern age for more info visit our site Azure Global and join us also On Facebook

Local government cuts unfair to north-east, say councils

The average council in the north-east will lose £665 per person against £305 in the south-east by 2017-18 

Councils in the north-east of England will lose more than twice as much funding per person as those in the south-east over the next five years, according to a local government lobby group which says government cuts are widening England's economic divide.

A group of mainly urban councils says its calculations, based on cuts already pushed through and changes in local funding to come, suggest the average council in the north-east will lose £665 per person, compared with £305 in the south-east, by 2017-18.

Sigoma, the Special Interest Group of Municipal Authorities, representing large towns and cities in the northern, Midlands and south coast regions of England, accused the government of pushing some councils to breaking point and warned: "Any economic recovery may bypass parts of the UK."

But the government rejected the calculations and pointed to other figures suggesting some northern councils have considerably more spending power than the national average.

Sigoma, which is part of the Local Government Association, said its report took into account new funding structures and welfare changes. It argued that the changes meant councils suffering the largest cuts were often those facing the highest costs.

Its report, timed to coincide with an opposition day debate on the cost of living, said: "The government has failed to consider the cumulative impact of their reforms on councils, only assessing one change at a time. The large number of changes means that the same councils are being hit again and again with cuts in funding. Following years of disproportionate funding cuts councils have had to find significant savings so far; with opportunities for further savings now harder to find and given the rising cost of adult social care, some services are now at breaking point."

The councils are calling on the chancellor, George Osborne, to heed their warning that services will suffer as he prepares to present his autumn statement next week, when he will outline government tax and spending plans.

Steve Houghton, Sigoma chair and leader of Barnsley council, said his group's assessment "shows the government's complete disregard for the mounting pressure faced by certain councils and the pain it is causing their residents".

He added: "The government must make fair funding a key priority to allow councils to provide essential services without the growing distraction of a service failure."

However, local government minister Brandon Lewis rejected the report. "This crude lobbying exercise is based on made-up extrapolations designed to scaremonger rather than inform public debate. Council funding is fair to north, south, rural and urban areas. It is distributed to ensure the smallest reductions for the councils most reliant on government support," he said.

He referred to documents from the House of Commons library that showed that north of England councils have more spending power per household than their southern counterparts. "This year Newcastle has a spending power per household which is £300 more than the national average and £700 more than Wokingham, for example," Lewis added.

Labour says it will use its opposition day – when opposition parties can choose a topic for debate – to highlight a "growing cost of living crisis" across Britain caused by prices rising faster than wages. The party says London, Yorkshire and the Humber, the North West, Wales and the East of England have seen the biggest falls in real wages since 2010.

A separate report warns of a growing north-south divide in the jobs market as a southern construction boom fuels demand for workers in the south.

The focus on homebuilding and infrastructure projects like Crossrail in the South has seen almost half of the 55,663 construction vacancies advertised in October fall in London and the South East, according to a monthly labour market report from jobs search website Adzuna. Only 6% of advertised vacancies were in the North West and 3% were in the North East.

Across all sectors of the economy nine of the top ten cities to find a job are in the South, where there are twice as many vacancies as jobseekers, Adzuna said. Nine of the worst ten cities to find a job are in the North, with more than 20 jobseekers for each vacancy in Salford, the Wirral, Sunderland, and Hull

Article Source : http://www.guardian.co.uk
Azure Global’s vision is to be widely recognized as a reputed firm of financial business advisors, achieving real growth for ambitious companies and to become the first choice for F&A outsourcing for accountancy practices and businesses alike and if u want to Setup ur business in United Kingdom then  its not difficult in this modern age for more info visit our site Azure Global and join us also On Facebook

Zero-hours contract workers in UK find their shifts are cancelled at will

Many told shifts cancelled just hours before starting work – but CIPD says survey shows the contracts are unfairly demonised

Almost half of zero-hour contract workers have had their shifts cancelled without any notice, according to the first in-depth study of the way more than 1 million people on the controversial contracts are treated.

Two out of five workers on the contracts said they had been informed only hours before starting work that a shift had been cancelled. A further 6% had been told as their shift was about to begin.

The study also found that 20% are sometimes or always docked wages or penalised in some way if they are not available for work. But the survey of 1,000 zero-hour workers by the Chartered Institute of Personnel and Development (CIPD) found they were happier with their work-life balance than the average worker and equally satisfied with their job. Almost half of zero-hour workers were satisfied with their job against 27% who were dissatisfied.

A CIPD spokesman said the findings showed calls for restrictions on the contracts' use were misplaced and firms using them had been "unfairly demonised".

"The use of zero-hours contracts in the UK economy has been underestimated, oversimplified and, in some cases, unfairly demonised," he said. "Our research shows the majority of people employed on these contracts are satisfied with their jobs."

But the CIPD admitted that employers exploited the contracts to cancel shifts with little or no notice and penalised staff who were unable to attend a shift.

"However, we also recognise that there is a need to improve poor practice in the use of zero-hours contracts, for example the lack of notice many zero-hours staff receive when work is cancelled.

"If this is unavoidable then employers should at least provide some level of compensation. In addition, it seems that many employers and zero-hours staff are unaware of the employment rights people on these types of working arrangements may be entitled to."

In the summer the institute said the initial findings of its employment survey found that 1 million workers were employed on the contracts, at the time quadrupling the official figure.

The contracts, which allow an employer to hire staff without an obligation to provide any minimum working hours, are used widely in the care industry, hotel and leisure sector and by many retailers. In the last two years public sector organisations have transferred staff to zero-hour rotas.

Labour said the findings showed there was still widespread abuse of the contracts and the government needed to act.

Ian Murray, shadow minister for trade and investment, said Labour would ban employers from insisting workers be available when there is no guarantee of work. It would also let workers work for more than one firm without being penalised and force firms to give a minimum hours contract to longstanding zero-hours workers. "While the government has failed to act, Labour would outlaw the exploitative use of zero-hours contracts," he said.

Ian Brinkley, policy director at the Work Foundation, an employment thinktank, said the report showed there was a large minority of affected workers citing significant problems around pay, hours and the fear of being penalised.

Article Source : http://www.guardian.co.uk
Azure Global’s vision is to be widely recognized as a reputed firm of financial business advisors, achieving real growth for ambitious companies and to become the first choice for F&A outsourcing for accountancy practices and businesses alike and if u want to Setup ur business in United Kingdom then  its not difficult in this modern age for more info visit our site Azure Global and join us also On Facebook

DFS supports British manufacturing resurgence

Sofa maker is among firms bringing jobs back to the UK from overseas as Chinese labour falls out of favour

Anyone subjected to brash DFS adverts promising double discounts and 0% finance on sofas would think it was impossible for the furniture firm to get its products from anywhere other than low-cost factories in the developing world.

However, the company is one of a number of British businesses, including Golden Wonder, Hornby and Aston Martin, that has stopped shipping products back to the UK and is transporting jobs to these shores instead, making it the biggest sofa manufacturer in Europe.

At a DFS factory on an industrial estate in Derbyshire there are banks of sewing machines, state-of-the-art fabric cutters and gas-powered staple guns.

Harvey Ellis, head of manufacturing at DFS, who oversees the 838 workers on three sites and in two woodmills, explained: "Once we receive an order, it takes just four days to go from an order on our screens to being loaded on to a van. The frames are shipped in from our wood factory six miles away and we will make 3,000 pieces a week. Today we'll complete 900."

In three years DFS has toned down its Chinese activities to join the march of the makers, increasing UK production by a quarter. One worker, nail gun at the ready, said he could cover an entire sofa with fabric – sewn by the factory's seamstresses – in less than 30 minutes.

It is a skill in much demand. The desire for British-made products has become so great that the factory in Alfreton has just increased its workload, adding an extra shift to keep it running 16 hours a day. Along with two more factories in Doncaster and Long Eaton, it means DFS now makes nearly all of its fabric sofas in the UK, accounting for half of all furniture sold by the company. Only the labour-intensive leather products are still made abroad.

DFS chief executive Ian Filby said he wanted to see the business return to its British roots, and that customers now asked why the company did not make more of its UK credentials.

"Customers are astounded to think that a value-for-money player is also a major UK manufacturer," he said. Then, with a nod to the dark days of the three-day week, he added: "We all know about the bad old seventies, but the historical mindset of 'all UK manufacturing is shoddy' has gone full circle and people now see the UK as the sort of place where people work hard and make a decent crust. People believe that quality product is made in the UK and aren't going to buy British if the product is poor."

DFS appears to have tapped into a patriotic zeal among the British public. Its market share has risen from 25% to 28% in the last three years and Filby believes that there are also compelling financial reasons for bringing work back to the UK.

"I'd be surprised if there's not a lot of British manufacturers wanting to be more responsive to shorter lead times. We're never going to compete with the sweatshops of the Far East as a country, but you can manufacture here as long as you're adding design or R&D [research and development]. I think the other phenomena which people recognise and is going to continue, is that moving things around the globe is expensive."

And it is not just DFS that has seen the benefits of shifting work back to the UK. This year Golden Wonder revealed that its Pot Noodle snack will be made in Leeds instead of being shipped 10,000 miles from China, and Aston Martin Rapide S cars are now built in the Midlands, while clothing businesses including Topshop and Marks & Spencer are selling more British-made outfits.

Lee Hopley, chief economist at the EEF manufacturing association, explained that manufacturing in the UK was increasing as costs overseas grew and customers became more demanding.

"I think customers would be surprised by how much is made in the UK," she said. "There is a lingering perception that it is still made overseas. Manufacturing output is higher now than the 1980s in real terms, although we're still 11% below our pre-recession peak. There's been big investment in technology and equipment, while there is also a focus now on innovation to look beyond the product."

Model railway maker Hornby is another example, shifting its paint production back to the UK from China after there were fears that any quality issues would take several weeks to be resolved. Executive chairman Roger Canham added that making products closer to home helped businesses respond to demand – and check for errors – more easily.

"It takes four weeks for a shipment to arrive from China, which means if you want to check the quality you have to wait until it arrives," he said. "Now, if I want to check all I need to do is jump in a car and go to the factory.

Bringing jobs back home: DFS chief executive Ian Filby at the furniture manufacturer's production facility in Somercotes, Derbyshire"There was a huge surge in manufacturing from China in the 1990s, but now that wages are increasing and shipping is more expensive it's slowed down. We've got a new range of Airfix quick- build models which we will manufacture in the UK because it gives us a better chance to respond to demand quickly."

And with the shift in work back to the UK come much-needed new jobs, at a time when youth unemployment running at around 20%.

Filby said he would create 250 new jobs at DFS this year, having hired 400 new people in the 18 months to January, and revealed that one of the benefits of having UK factories was the loyalty he got from the staff who had worked there for generations.

At Alfreton, for example, nearly half the staff have been there for five years, and 35% have notched up 10 years' service. Owned by private equity group Advent, DFS has promised to reward staff for their loyalty with 1% of any profit made from the company's sale, which is expected to happen over the next few years.

Another reason why British workers will welcome the return of a manufacturing base that dwindled for decades but is showing renewed determination to compete with the rest of the world.

Article Source : http://www.guardian.co.uk

Azure Global’s vision is to be widely recognized as a reputed firm of financial business advisors, achieving real growth for ambitious companies and to become the first choice for F&A outsourcing for accountancy practices and businesses alike and if u want to Setup ur business in United Kingdom then  its not difficult in this modern age for more info visit our site Azure Global and join us also On Facebook