Jobless claims in the U.K. increased 24.4K to 2.47M in August, which is the highest since 1995, with the claimant count rate tipping higher to 5.0% from 4.9% in the previous month, and the labor market is like to weaken further throughout the second half of the year as businesses continue to scale back on production and employment in an effort to reduce costs. At the same time, the annual rate of unemployment measured by the International Labour Organization’s standards rose to 7.9% during the three month through July from 7.8% in the previous to mark the highest reading since 1996 despite forecasts for a rise to 8.0%, and the data foreshadows a weakening outlook for private sector spending as households face fading demands for employment paired with tightening credit conditions. Nevertheless, the British Chambers of Commerce anticipates job losses to fall at a slower pace over the coming months and projects unemployment to peak at 3M amid an initial forecast for a rise to 3.2M, and businesses may increase their willingness to remain works going forward as policy makers anticipate economic activity to improve throughout the year.
