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Unemployment rising at slowest pace for a year, manufacturing picking up and services sector still growing
â€¢ Unemployment in the UK is on the rise, but at its slowest pace for a year. It reached 2.67m during the three months to January, taking the unemployment rate to 8.4%, which compares favourably with the eurozone’s 10.8% and 10.2% across the 27 European Union countries.
â€¢ Manufacturing has strengthened after a big dip during the worst of the eurozone crisis in November and December. The overall purchasing managers’ index (PMI) rose from an upwardly revised 51.6 in February to 52.1, its highest level for 10 months.
â€¢ The services sector, which ranges from hotels and restaurants to banks and transport and makes up about three-quarters of the economy, is still growing, despite falling back in February.
â€¢ Construction has not fared so well. Output fell by 2.3% in January 2012 compared with January 2011, according to the Office for National Statistics, dragged down by a collapse in school building contracts. A Markit survey was more positive, however, showing a rise to 54.3 on its index in February, up from 51.4 in the previous month.
â€¢ Inflation is falling. Lower energy bills for many UK homes helped bring the consumer price index down to 3.4%, its lowest level in more than a year. However, it was slightly higher than expected and is still way higher than the 2% target. Also worrying is that the oil price remains a threat.
â€¢ Retail sales unexpectedly steadied in March. The Confederation of British Industry distributive trades survey’s March sales balance rose to zero from -2 in February, in contrast to economists’ expectations of a fall to -6. Durable goods sales fell at their slowest pace since December 2010 and there were also improvements in the clothing, furniture and do-it-yourself markets.
â€¢ House prices have undergone a first monthly rise since 2010 due to growing demand from buyers and a lack of homes on the market, according to the latest Hometrack survey. The 0.2% increase in March follows a flat start to the year and is the first rise in 20 months.