Unemployment Figures Confirm Weak Economic Outlook, says IoD

12 October 2005

New unemployment figures, published today, show the economy is still slowing down, the Institute of Directors (IoD) said. The unemployment claimant count is up 62,000 since the start of 2005 and the trend remains upward.

The IoD also predicted that the unemployment statistics, coupled with the latest earnings figures, will allow the Bank of England to cut interest rates next month.

Graeme Leach, Chief Economist at the IoD, said:

"Today's figures provide yet more statistical evidence of a significant slowdown in the UK economy. Taken in conjunction with the consumer slowdown in the High Street, weak GDP growth and little evidence of rising energy costs increasing economy wide inflation, today's numbers suggest that the Bank will reduce interest rates in November.

"However, the latest figures showing growth in average earnings unchanged at 4.2%, is good news, given the concern that rising energy costs may fuel demand for higher pay rises."