UK News

Insights from the UK and beyond

Job crunch Britain: how have you been affected?

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Net job creation in the UK has almost stopped as employers feel pessimistic about prospects for the economy, the latest quarterly Labour Market Outlook survey by KPMG and the Chartered Institute of Personnel and Development (CIPD) has found.

The balance between the proportion of employers looking to increase staff levels over the next three months and those expecting to cut has fallen from +41 in autumn 2007 to +2 in autumn 2008 – the lowest figure recorded since the survey began in spring 2004, according to the Payroll and Human Resources Newsletter.

Of the 721 employers surveyed, 83 per cent anticipated that Britain’s economic condition would further deteriorate this autumn and only one percent said they thought there would be an improvement.Respondents felt more optimistic about their own organisation though, with only 25 per cent believing that things would get worse.

Even though inflation is running at a 16-year high of 5.2 percent, staff pay excluding bonuses is seen increasing on average by just 3.5 per cent when the next pay review is due, while the expected average increase including bonuses has risen from 3.9 per cent to 4 per cent.

With official UK unemployment data for October due out on Wednesday, CIPD Chief Economist John Philpott sees a gloomy winter ahead:  “With pay increases at best modest for those still in work, the harsh chill of recession will make this the toughest winter for UK households for almost two decades.”

Is the rates decision a good move?

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Bank of England policymakers have held rates steady at 5 percent for a fifth month running.

Inflation currently stands at more than double the central bank’s 2 percent target but any rise in rates to try to choke that off risks aggravating the overall economic slowdown caused by the credit crunch.BoE

Comeback for the Misery Index

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misery4.jpgCredit crunch, surging food prices, rising unemployment, house prices tumbling, maybe even a recession …. isn’t it all enough to make you feel miserable? And I’m not even mentioning the dismal British summer weather.

And all that desolation can be measured – the Misery Index is a financial pain barometer measured by adding the rate of inflation to the unemployment level.

Has the Bank been too cautious?

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rtx71g6.jpgBattling with the twin evils of soaring inflation and weaker growth, the Bank of England has kept interest rates at 5 percent for the fourth month running.

With the risk of Britain possibly facing its first recession since the early 1990s, the MPC has clearly opted for caution.

R-word looms as retail sales slump

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Exactly one year since the credit crunch started retail sales have shown their biggest fall on record in Britain, news that is likely to spur recession talk among consumers, who are already feeling the pinch from rising fuel and food costs.

For sure, the 3.9 percent drop in June was much worse than expected – economists had forecast a 2.5 percent decline – but shop prices are still higher than a year ago and the retail sales data series is notoriously volatile.retail-salessmaller.jpg

Council workers strike – is it justified?

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(updated with new photo)

** For full coverage of politics click here**

Hundreds of thousands of council workers are striking over pay in the biggest bout of industrial unrest in years.

Members of Unite and Unison are protesting over deals to increase their pay by 2.45 per cent, which is below the rate of inflation and which they say means an effective pay cut.

Food for thought

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food1.jpgGordon Brown is asking us to stop wasting so much food and suggests that if we threw less away, demand would fall and then so too would food prices.

He says we’re throwing away around eight pounds worth of food a week, adding something like 420 pounds to the average family’s shopping bill.

What’s your verdict on Gordon Brown?

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brown1.jpgBy common consent, Gordon Brown’s first year is ending up as a shocker for Labour.

It may have started well last June with assured handling of a bomb threat and a swift response to the foot and mouth outbreak last August. Pledges to cut back on two largely unpopular measures: Tony Blair’s plans to open “super casinos “and the extension of drinking hours, also struck a chord with voters.

Are you feeling the pinch?

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pounds-in-hand.jpgAnnual inflation has hit 3.3 percent, its highest level since the Bank of England was given control of interest rates 11 years ago.

But for many their personal inflation rate will be much higher, depending on where they live, and how much of their income is devoted to basics like food and energy costs.

On the rack in Bournemouth

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smith.jpgJacqui Smith has probably faced some unwelcoming audiences in her time as Home Secretary but it is unlikely she has faced one as tough as the 1,000 angry police officers she encountered on Wednesday.

Smith knew she was in for a grilling when she spoke to delegates at the Police Federation conference, furious that a pay rise, recommended by an independent panel, had not been
honoured in full.

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