Reading between the lines of the unemployment figures
While the headlines today suggest quite rightly that unemployment in the UK has fallen, the real picture regarding the UK economy is evident below the surface. The number of people in so-called "long-term unemployment" has risen to the highest level for 13 years and there are concerns this could move higher in the short to medium term. Indeed many believe that unemployment, currently 2.46 million, could actually increase to over 3 million by the end of 2012. So what does this mean for the UK economy?
While there may be some kind of short-term "feel-good factor" with regards to unemployment there is no doubt that once public sector budget cuts kick in there will be a large increase in unemployment numbers. As the UK economy struggles to push ahead over the next two years we may well see private sector companies looking to reduce their costs and reduce their headcount. This will then have a knock on effect to disposable income, mortgage arrears, the property market and consumer sentiment in the UK.
In simple terms, UK unemployment numbers hold the key to the short to medium-term direction of the UK economy and at this moment in time they are not looking too promising.
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