13/08/2001

Warning signs indicate end of eight-year fall in unemployment

Recent figures released could be an indication that the eight-year fall in unemployment may be over.

Data from the Office for National Statistics expected to be released this week are expected to show a substantial though significantly smaller fall in the number of jobless benefit claimants in July 2001, following on from a huge 12,000 drop reported in June.

According to the FT, some economists think the UK labour market is levelling off and may well be about to experience an about turn.

So far this year, the UK job market has outperformed the US and the European job markets where unemployment has started to increase. While UK companies have been hanging on to their skilled workers and the service sector has been snapping up any surplus skilled labour, this is widely expected to come to an end.

Labour force indicators have begun to show a downturn job advertising in newspapers, which has dropped by almost 20 per cent in the year to June.

However economists stress that even a doubling of unemployment would not exceed the low point of the last recession, and reported UK job vacancy figures remain relatively high (SP)

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