U.K. Jobless Cliams Jump As Economy Slows

April jobless claims in the U.K., jumped by 7,200 against expectations of 0, as companies hastened their pace of layoffs. It marked the third straight month of increases as March’s initially reported reduction of 1,200 was revised to an increase of 3,600 claims. The rise in claimant count was the highest since April 2006. Although, the unemployment rate remained at 2.5%, expectations are that it will increase as the housing slump and credit crunch continue to filter through the economy. Despite the declining labor market wages inc bonus rose to 4% from 3.8% adding more pressure to inflation concerns, in addition to record food and oil prices. The BoE will be hard pressed to lower rates again as inflation continues to rise, jumping to 3.0% in April. Their upcoming inflation report is expected to be extremely hawkish and to dampen expectations of a forthcoming rate cut.

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