Magazine article Public Finance

Numbers Game

Magazine article Public Finance

Numbers Game

Article excerpt

As the government faced growing criticism over its health reforms, local government cuts and university funding review, there was some welcome good news on the economy. Both unemployment and inflation have fallen despite expectations to the contrary.

UK unemployment decreased by 17,000 in the three months to February 2011 to stand at 2,480,000. There was an increase in unemployment among 16 to 24-year olds (up by 12,000 to 963,000) but it did not breach the 1 million mark as had been feared.

Similarly, CPI inflation dropped to 4.0% in March from 4.4% a month earlier and RPI inflation - which includes mortgage interest payments - fell to 5.3% from 5.5%. This is still twice the Bank of England's target rate but the movement downwards reduced the likelihood of a rise in interest rates in May. The Bank's Monetary Policy Committee has kept rates at a record low for 25 months in a row.

A rise is still on the cards, but is now likely to be later in the year. …

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