UK Claimant Count Turns Lower Amid Reports With Conflicting Signals

The UK claimant count continues to make its slow turn to lower levels. The unemployment rate calculated from claimant data also is trending lower. However, a broader ILO survey has shown the opposite to be true. On the ILO measure the number of unemployed is up to its highest tally since 1994. As in the US, the ranks of the long-term unemployed are growing in the UK. The ILO rate of unemployment, also a separate calculation, went up to 8% from 7.8%.

These metrics take on added importance in the middle of UK elections. The claimant figures tend to grab the headlines in the UK but the ILO numbers are usually mentioned too. While the economy does seem to be turning the corner, the speed of the turn is slow and the political fighting over what it means is intense.

In a release of the minutes of the BOE’s last meeting there is mention of a growing risk of inflation. Up to now’ the BOE has been talking of an inflation overshoot of its target that was not a matter of concern. In these minutes for the first time there is talk of ‘upside risks’ to inflation laid at the feet of rising oil and commodity prices. Still, the bottom line is that the committee did not see these risks as substantial enough to call for any change in the current policy path.

The UK seems to be in the same boat as every other major economy in so far as its economic data blow hot then cold sometimes on the same day! This obviously this makes it hard to get a fix on what the economy is really doing. On top that, electioneering just muddies the waters even more as politicians try to take each number to make some political gain from it. Now the BOE is seeing shifting risks for inflation. With all of this in process the UK remains one of the most enigmatic economies in Europe.