"Unemployment Set to Rise in 2012, Suggests CIPD"

UK unemployment is set to keep rising to 2.85m in 2012 and peak in 2013, says a report by the Chartered Institute of Personnel and Development (CIPD).

The think tank, which specialises in employment, warns the private sector will fail to offset the 120,000 job losses in the public sector in 2012. But is does not detect signs of widespread new redundancies in the private sector.

A government spokeswoman said the labour market was stabilising. Government measures should also stop the numbers of young and long-term jobless getting worse, the CIPD says.

"As long as there is a relatively benign outcome to the eurozone crisis we expect the 2012 jobs recession to be milder than that suffered in 2008-9," said John Philpott, chief economic adviser at the CIPD.

"But unemployment in the coming year will be rising from a much higher starting point, so the UK jobs market in 2012 will be weaker than at any time since the recession of the early 1990s."

In response, a spokeswoman for the Department for Work and Pensions said: "There has obviously been an unwelcome increase in unemployment since the summer but the latest unemployment figures show some signs that the labour market is stabilising.

"The number of people in employment is higher than last month's published figure and the number of unemployed people is steadying." She added that "the increase in those claiming Jobseeker's Allowance has slowed and our welfare reforms are having a positive impact with overall benefit claimant numbers falling by around 40,000 in the last 18 months."

However, shadow work and pensions minister Ian Austin said it was "crystal clear that this government is failing to get people off benefits and into work".

"With unemployment continuing to rise, the benefits bill is going up too - and that's making the deficit harder to bring down."

Record joblessness

The forecast is more downbeat than estimates published by the Office for Budget Responsibility (OBR) in November. The OBR, which was set up by the government to provide independent assessments of the UK economy, expects unemployment to peak at 8.7% of the total workforce in the final quarter of 2012. The CIPD believes the unemployment rate will hit 8.8% in 2012.

Official figures showed that the UK unemployment hit its highest level since 1994 in the three months to October, when it rose by 128,000 to 2.64 million.

The Office for National Statistics (ONS) said the jobless rate for the three months to October was 8.3%, up from 7.9% in the same period last year. Youth unemployment rose to 1.027 million, the highest since records began in 1992.

( Source : http://www.bbc.co.uk/news/business-16342072 )

"UK Alone as EU Agrees Fiscal Deal"

European leaders say 26 out of 27 EU member states have backed a tax and budget pact to tackle the eurozone debt crisis.

Only the UK has said it will not join. Prime Minister David Cameron said he had to protect key British interests, including its financial markets. The 17 countries that use the euro have all agreed to the deal.

Nine other countries have said they will sign up, some pending consultations with their parliaments. Hungary originally said it would also remain outside the deal but has now changed its stance.

'Stable euro'

The UK effectively used its veto to block an attempt, led by the French and Germans, to get all 27 EU states to support changes to the union's treaties.

Instead, eurozone members and others will adopt an accord with penalties for breaking deficit rules. It will be backed by a treaty between governments, not an EU treaty. "In fact, 26 leaders are in favour of joining this effort. They recognise the euro is a common good," said European Council President Herman Van Rompuy. Mr Cameron said he had done "the right thing" by not signing up to the deal, as it was not in Britain's interests.

"We were offered a treaty that didn't have proper safeguards for Britain, and I decided it was not right to sign that treaty," he told the BBC. "We're still in the single market. That is the best safeguard of keeping markets open," he said. German Chancellor Angela Merkel said the UK was the only country to have expressed reservations, but that Mr Cameron had recognised that a stable euro was in Britain's interest.

Of the nine other EU countries outside the euro, Hungary, the Czech Republic and Sweden have said they must consult their parliaments. Six others - including Denmark, Poland and Latvia - have agreed to join the new deal. However, some countries - such as the Republic of Ireland, which is in the eurozone - have a constitutional requirement to hold a referendum on any major transfer of powers to the EU.

The Irish Minister for European Affairs, Lucinda Creighton, told the Reuters news agency the probability of a referendum was "50-50 and we will be looking at the detail over the next couple of weeks". EU leaders aim to have the pact - known as a "fiscal compact" - ready to take effect by March.

Its main provisions include:

·         a cap of 0.5% of GDP on countries' annual structural deficits

·         "automatic consequences" for countries whose public deficit exceeds 3% of GDP

·         the tighter rules to be enshrined in countries' constitutions

·         the EU's permanent bailout facility, the European Stability Mechanism (ESM), to be accelerated and brought into force in July 2012

·         the adequacy of 500bn-euro (£427bn; $666bn) limit for the ESM to be reassessed

·         eurozone and other EU countries to provide up to 200bn euros to the International Monetary Fund (IMF) to help debt-stricken eurozone members.

The BBC's Europe editor Gavin Hewitt, in Brussels, says the new pact will be quicker to set up than a change to the treaty but it may prove less rigorous. But, he says, Europe has taken a big step towards closer integration, with binding rules over tax and spending, and sanctions against countries that overspend.

Nearly 10 hours of talks could not produce an agreement involving all member states. French President Nicolas Sarkozy said the sticking point had been Mr Cameron's insistence on a protocol allowing London to opt-out on proposed change on financial services.

"We could not accept this," he said. IMF chief Christine Lagarde welcomed the deal as "a really good step in the right direction".

But the announcement from Brussels failed to lift the markets, which are still hoping for more intervention by the European Central Bank (ECB), and European stocks traded slightly down on Friday.

( Source : http://www.bbc.co.uk/news/world-europe-16115373 )

"Australia's Economy Expands 2.5%, Led by Mining"

Australia's economy grew more than expected in the third quarter, driven by building and mining activity.

Gross domestic product (GDP) rose 2.5% in the three months till the end of September from the same period a year earlier, the statistical bureau said. Analysts expected a gain of 2.1%, and the Australian dollar rose slightly on the news. Despite the stronger growth, there are fears about coming quarters with a slowdown expected in Europe and China.

Grim outlook?

The weaker outlook is what prompted the Reserve Bank of Australia on Tuesday to cut interest rates by 25 basis points, to spur domestic demand. It was the second rate cut in as many months. "It seems likely to us that by the next [RBA] meeting, the outlook for global growth will be worse," said Rob Henderson, head of market economics at NAB. "We expect the next inflation outcome, due in late January, to be another low reading."

Resource boom

Despite the concerns, some analysts say Australia's economy seems better placed to weather the global economic problems than many others. "We see solid growth right through next year, which is diametrically opposite to what most of the developed world can look forward to," said Brian Redican from Macquarie.

Wednesday's data showed that compared to the April to June period growth in the quarter was at 1%. That is higher than growth rates in the US and most of Europe.

The continuing health of the resource industry is one of the main contributors, as miners expanded output to meet the needs of China and India. Business spending added 2.1 percentage points to GDP growth. Engineering construction rose 31% in the quarter.

Household consumption grew 1.2%, the data showed, adding 0.7 percentage points to GDP.

( Source : http://www.bbc.co.uk/news/business-16063331 )