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UK's jobless rate rise surprise

Wednesday, July 15, 2015 - 01:53

Britain's unemployment rate unexpectedly rose for the first time since 2013 in the three months to May. Hayley Platt looks at the reasons why and the outlook for the UK economy.

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Britain's Prime Minister called a London Underground strike last week "unacceptable and unjustified." He's on a mission to tighten strike laws. And since winning an outright majority in the last election he'll probably be able to - much to the unions dismay. Businesses have welcomed the plan which will require a turnout of at least 50 percent in ballots for industrial action. But there was some bad news for the UK economy - the unemployment rate rose for the first time in more than two years. Only by 0.1 percent to 5.6 percent - but enough to send sterling down half a cent again the dollar and for government bond prices to rise. Bill Blain is from Mint Partners. SOUNDBITE: Bill Blain, Strategist, Mint Partners, saying (English): "There's still much to fix with the UK economy but it is working better than many. Relative to other European countries I'd give it high marks. Could it do better? Yes, and that's what the last budget was trying to do with the productivity targets that have been put in place." The Bank of England will also take note of another rise. Total average weekly earnings in the three months to May, including bonuses, were 3.2 percent higher than the same period last year and a half a percent up on the previous quarter. So will interest rates rise from their current record low of 0.5 percent?. SOUNDBITE: Bill Blain, Strategist, Mint Partners, saying (English): "Long term, I think we are looking sometime soon after the Fed, the Bank of England are going to be raising rates. Now that's not necessarily a bad thing. Raising rates could actually trigger growth by re-establishing the concept that you have to create returns." British shoppers are also benefitting from near-zero inflation - consumer prices were unchanged in the 12 months to June. After five years of falling standards that's welcome by many. But enjoy it while you can - a rate rise is "moving closer" says bank governor Mark Carney.

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UK's jobless rate rise surprise

Wednesday, July 15, 2015 - 01:53