Economic data for the United Kingdom takes a further move in the right direction as unemployment fell by 49,000 to 2.51 million in the three months to September, taking the jobless rate to 7.8% from 7.9%.
Speaking at a news conference to present the Bank of England’s quarterly economic outlook, governor Sir Mervyn King said the figures showed that the labour market was “pretty strong”. But he said it was hard to reconcile this with the weak growth in the economy. Sir Mervyn said the economy had barely grown over the past two years and forecast that the recovery would be “subdued”. He also said that “The road to recovery will be long and winding, but there are good reasons to suggest we are travelling in the right direction,”.
At Johnson Gibbs, our opinion of the UK economic outlook is positive and although the recession has been long and painful some financial indicators are pointing to a slow but improving outlook. We remain concerned about the availability of credit to businesses and believe that this is holding back some further growth in the economy.
We also believe that in the foreseeable future, Interest rates will remain low and other assets such as equities will offer a better chance of growth over the medium to long term for investors.