Economic news from the UK and Europe

Today's economic news comes from the Guardian.


Osborne to miss deficit target as UK economy stalls and unemployment rises

Eurozone crisis hits home as Bank of England cuts growth forecasts and makes grim predictions of a weak recovery

the Guardian,
16 November, 2011

George Osbourne is braced to admit this month that the scale of Britain's economic slowdown, demonstrated yesterday by youth unemployment spiralling to more than 1 million, means he will be unable to meet his main deficit reduction target before the next election.

It is now expected that the Office for Budget Responsibility (OBR) will declare at the time of Osborne's autumn statement on 29 November that the downturn's impact is more permanent than thought and the government may not be able to meet its commitment to eliminate the structural deficit – the part of the deficit unaffected by growth – by 2014-15, as he predicted in the June 2010 budget.

For article GO HERE

Youth unemployment hits 1 million

• UK unemployment rises to 2.62m, a 17-year high

• Youth unemployment rate at 21.9%

• Claimant count rises to 1.6 million

• Employment minister blames the eurozone

the Guardian,

16 November, 2011

Youth unemployment has broken through the 1 million mark to a record high and the UK's wider unemployment rate has climbed to a 15-year high.

The government sought to blame the deterioration in the jobs market on pressures from the eurozone debt crisis but came under attack for ignoring problems at home.

Fears that young people are bearing the brunt of Britain's economic slowdown were underscored by official figures showing there were 1.02 million unemployed 16 to 24-year-olds between July and September. One in five young people are now out of work.

For article GO HERE

Eurozone bond markets in turmoil as France and Germany dig in over ECB

• Eurozone borrowing costs continue to spiral upwards

• Germany and France fail to agree on role of ECB

• Barack Obama attacks Europe's failure of 'political will'

the Guardian,

16 November, 2011

The row between France and Germany over whether to use the European Central Bank to rescue the eurozone has intensified, further shattering international confidence that a solution can be found to the escalating debt crisis.

On a day when the US president, Barack Obama, accused the eurozone of suffering from a "problem of political will", Paris and Berlin clashed over whether the ECB should be called on to do more to bail out countries that are struggling to borrow.

Obama, on a visit to Australia, warned that Europe's leaders must do more to save the single currency.

"Until we put in place a concrete plan and structure that sends a clear signal to the markets that Europe is standing behind the euro and will do what it takes, we are gong to continue to see the kinds of market turmoil we saw," he said.

Despite his pressure and some renewed buying of Spanish and Italian bonds by the ECB, the rout in markets continued and yields on debt around the eurozone continued to climb. In Italy borrowing costs remained at unsustainable levels, with the benchmark 10-year bond yield at 7.12%.

Tension between France and Germany was behind much of the market turbulence, traders said.

For article GO HERE