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Employment figures reveal a drop in the
jobless figure to a 27-year low. The number of people out of work and
claiming benefit dropped by 6,000 to 939,000 in March, giving a jobless rate
of 3.1%.
The annual growth rate for pay and
bonuses slowed to 1.9% despite some signs of a tightening labour market.
Figures published by the Office of
National Statistics show that the pay gap between Scotland and England has
increased by 11.6%, the widest since records began in 1989. Average
earnings stand at £297.60 per week (£1,289 per month) for Scotland, compared
with £320.90 per week (£1,390 per month) in the South.
The Scottish TUC says this is a
reflection of the higher number of well-paid manufacturing jobs, which, have
been lost, and an increase on lower-skilled employment. Other factors
include over-reliance on the less well-paid public sector, and the
willingness of potential higher earners to move to more prosperous areas
south of the border.
The minimum wage will increase to £4.20
per hour from October. The rate for workers aged 18-21 will increase to
£3.60 per hour.
Following the budget increase in
employers’ national insurance contributions, there have come warnings that
the measure will not only restrict companies’ ability to invest in growth
and recruit additional staff, but that employers might have no option but to
reduce the size of the workforce in order to meet the extra cost.
A survey of 59 FTSE 100 and FTSE 250
companies has revealed that 64% of these firms had shortfalls in funding
levels for their pension schemes at the end of 2001, resulting mainly from
falls in the stock market.
Companies are now required by accounting
regulation FRS17 to disclose pension funding levels on an annual basis,
thereby preventing deficits from being disguised by being smoothed out over
a number of years. The introduction of this regulation has been blamed for
the closure of many companies’ generous final salary schemes.
The Monetary Policy Committee were
unanimous in their decision to hold interest rates at 4%, a 38 year low.
The MPC appear to be more concerned with
growth prospects than worried about inflationary pressures. They felt that
news about the UK economy was mixed and doubted whether either recent growth
in wages or consumer spending would be long maintained.
The chief economist of Barclays Capital,
David Hillier, felt that the minutes of the meeting indicated that the MPC
were moving towards an increase in rates.
UK economy grew by 2.2% during last
year’s recession, outperforming all of its European rivals and prompting the
Organisation for Economic Co-operation and Development to revise its
forecasts upwards for this year and the next to 1.9% and 2.8% respectively.
However, these figures remain less optimistic than the Chancellor’s
estimates of 2%-2.5% in 2002 and 3%-3.5% next year, and the Ernst & Young
Item Club expects this year’s rate of growth to be even lower at 1.8%,
increasing the possibility of further tax rises. The OECD foresees interest
rates climbing, impacting on housing markets and dampening consumer
confidence.
62% of companies are more optimistic
about the future, compared to 21%, which are more pessimistic, according to
a survey of 500 companies by Continental Research, which said that this
level of optimism had not been seen since January 1997.
Recent indicators suggest that the five
economic tests laid down by the Treasury for determine Britain’s readiness
to adopt the euro have largely been met, backing a prediction by the Nigel
Griffiths, the minister for small business, that the pound would be dropped
by the end of 2004.
Concern has been expressed by a leading
European think tank regarding the application of the Maastricht criteria for
economic convergence, designed for highly industrialised western European
economies, to the economies of countries such as Hungary, Poland and the
Czech Republic which are predicted to experience faster growth and higher
inflation than current member states.
The official policy remains that the
Maastricht criteria must be fulfilled, with membership of the ERM for at
least two years a further prerequisite for the eligibility for admittance to
the EU.
Interest rates for the eurozone remain
unchanged, as the European Central Bank continues to maintain its key rate
at 3.25%.
Economic recovery in the United States is
set to take longer than had been predicted, as the dollar continues to fall
against the euro following a government report that unemployment in the US
has reached its highest level since 1994.
Following the Chancellor’s pledge that
the Government wants to improve the demand for risk capital, Nigel
Griffiths, the Small Business minister, has announced measures to help small
businesses with high growth potential to maximise financing opportunities by
providing access to high quality management and financial expertise.
The Disability Rights Commission has
produced a guide on forthcoming changes to the laws on disability access.
Since October 1999 service providers have had to make reasonable adjustments
in the way they provide their services to allow access for disabled users.
Changes to the law which come into force
from 2004 will require reasonable adjustments to physical features such as
pavements, lifts, doorways, parking areas, etc.
The changes are far-reaching and
certainly any new build or improvement plans ought to take into account the
need to comply with the new legislation. |
