Good News Or Not ?

[youngmafbog]

http://www.theguardian.com/business/2014/jan/22/uk-unemployment-rate-forward-guidance-rate-rise

Seems that unemployment rates (pretty much on the rise since mid 2007) have now taken a good fall. This brings it perilously close to the BoE targets for interest rate increase.

So, anyone on here looking for higher interest rates, anyone not?

And whist overall rates have dropped the youth unemployment remains stubbornly at 20%. Why is this do you think?

//The total number of people out of work fell to 2.32 million people in the three months to November, from 2.39 million, and the youth unemployment rate fell to 20% from 20.5%.//

[Clanad]

At least here in the u.S., such stats as falling unemployment (national overall rate is 6.9%) is that it doesn't take in to consideration the percentage of unemployed that have given up on finding a job, reached the end of their unemployment benefits (currently 99 weeks) and so aren't in "the pool" so to speak. Most economists believe the actual unemployment rate when those facts are considered is closer to 13%... maybe higher. Last quarter only 79,000 new jobs were created when it had been expected that perhaps 230,000 would be, but even that is far below the amount required to seriously affect the unemployment rate...

[anotheoldgit]

As well as this,

http://www.theguardian.com/business/2014/jan/06/uk-manufacturing-forecast

Does anyone want to take the chance of Labour messing it all up once again?

[Gromit]

UK is awash with Zombie Companies and an interest rate rise would kill them (good thing or not? That would have a negative impact on employment).

Many mortgaged home owners are still struggling. Again, rises would send some over the edge.

My guess is that it is still too early. An early rise could quickly undo the little that has been achieved.

[Gromit]

AOG

The Uk has been in recession/stagnant growth for longer than our European competitors, so manufacturing suffered more here than in Germany. So we are growing faster than they are, but we are a long way behind them. It is good that we are heading in the right direction, but not exactlty much to crow about.

[KARL]

Not much to crow about indeed. Yesterday I came across international statistics and last month (Dec) the unemployment rate in Iceland was 4.4%. Five years ago Iceland's crisis was talked about as by far the worst in Europe. The UK provides a poor comparison. Why ?

[youngmafbog]

I dont think Iceland and the UK are comparable, not sure we are even comparable to Germany to be honest especially when it comes to manufacturing.

For instance does Iceland have EU (and non EU) immigrants piling in to take up jobs (and/or benefits) ? Germany does of course, but they have been the power horse of Europe for many many years now.

[jake-the-peg]

One of the problems is that the economic 'recovery' has not been reflected in people's pay packets.

We know that we are running very high levels of private debt and that much of that is fueling the recovery at the moment.

A rise in interest rates when consumers are not in a position to service that debt would increse the number of defaults which would then cause an increase in business losses along with the double whammy of their interest rates rising.

Any increase needs to be small 'toe in the water' stuff.

One of the problems with youth unemployment is the 'lost generation effect'

If you're unfortunate enough to come onto the jobs market in a recession you can end up competing with those just coming onto the market in subsequent years. To many employers someone having failed to find work for a year is a negative and they're more likely to go with new workers. A viscious spiral ensues resulting in people who've never worked.

Also as people are laid off and incomes are squeezed companies find a glut of trained experienced workers on the job market which is a disincentive to train new young people

Also recent legislation on age descrimination and allowing people to work past retirement clogs up the chain again affecting youth employment.

So with respect to the second part of the question there are these and probably other factors pushing down youth employment and not many pushing in the opposite direction.

[jake-the-peg]

Oh yes the torrents of immigrants

Have the press found a second Romanian flying into Luton yet? - that first one must be getting rather lonely!

[KARL]

I had to look up the answer. Being a member of the EEA and having ratified the Schengen Agreement, Iceland has a similar open door policy to that in place within the EU. In 2013 the total number of foreigners settling in the country amounted to around 1% of the total population - 600,000 people arriving to settle would be the equivalent for the UK. The largest numbers came from Poland, the USA came second. In fact, net immigration (foreign settlers arriving over those leaving) was 0.5%.

[anotheoldgit]

jake-the peg

/// Have the press found a second Romanian flying into Luton yet? - that first one must be getting rather lonely! ///

No he won't be lonely there are thousands more of his fellow countrymen and women already here.

[anotheoldgit]

Gromit

Ever thought of applying for the Shadow Chancellor's job?

http://www.dailymail.co.uk/news/article-2543669/Despite-IMF-boost-Balls-STILL-talks-recovery-Shadow-Chancellor-fire-dismissing-figures-branding-recovery-slowest-100-years.html

[Gromit]

AOG

You have gone a bit off topic there. The question is about interest rates. Balls was commenting on the IMF forecast. My answer was about our manufacturing not growth in GDP. GDP includes lots of other factors besides manufacturing.

No I would not fancy a Shadow job. I would take the main job, and I understand there will be a vacancy in 16 months.