Britons’ Job Fears Ease Though Labor Market Is Weak, Lloyds Says
February 06, 2012, 12:20 PM ESTBy Scott Hamilton
Feb. 6 (Bloomberg) -- Britons’ concern about losing their jobs eased last month, even though employment security remains “weak,” according to Lloyds Bank Corporate Markets.
An index of job security rose 9 points to minus 24 from December, the unit of Lloyds Banking Group Plc said in an e- mailed report in London today. However, that’s below the average seen during the last recession, it said. A measure of consumer inflation expectations fell to the lowest in more than two years, reflecting the economic slowdown.
Indicators of labor security “remain at weak levels and within ranges seen during the 2008-9 recession,” Lloyds economists Hann-Ju Ho and Jonathan Thomas wrote in the report. While December’s drop in the job-security gauge to the lowest since it began in 2004 “may have been a blip,” January’s rebound “did not pare all of last month’s decline and the level is still below the average” during the recession, they said.
The Bank of England will raise its target for asset purchases this week as the debt crisis in Europe may have already pushed Britain’s economy into a second recession, economists say. Inflation, as measured by the consumer-price index, has slipped from a peak of 5.2 percent in September and the central bank has said it will fall below its 2 percent target this year.
Lloyds’ January index of Britons’ inflation expectations dropped 6 points to 59 from December, the lowest since November 2009, today’s report showed.
“The continued downward trend in inflation expectations suggests that actual CPI inflation will continue to fall in 2012,” Ho and Thomas said. “The peak in CPI inflation will provide leeway for the Bank of England to further expand its asset purchase program to support the economy.”
Asset Purchases
The Bank of England’s Monetary Policy Committee, led by Governor Mervyn King, will increase its bond-purchase program by 50 billion pounds ($79 billion) to 325 billion pounds on Feb. 9, according to 35 of 51 economists in a Bloomberg News survey. Fifteen economists forecast a 75 billion-pound increase, and one no change.
A separate report today from Grant Thornton LLP and the Institute of Chartered Accountancy in England and Wales said their Business Confidence Index signals the U.K. economy may shrink by 0.2 percent in the first quarter, following a similar contraction in the last three months of 2011. That would be Britain’s first double-dip recession in more than three decades.
--Editors: Eddie Buckle, Jeffrey Donovan
To contact the reporter on this story: Scott Hamilton in London at shamilton8@bloomberg.net
To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net
