FTSE 100 Shrugs Off Weakening UK Unemployment Figures to Test Resistance
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FTSE 100 Shrugs Off Weakening UK Unemployment Figures to Test Resistance

FTSE 100 Shrugs Off Weakening UK Unemployment Figures to Test Resistance

The FTSE 100 spread betting market shrugged off the dire UK unemployment figures yesterday but the story is a sorry one for the UK economy.

Earlier in the year the private sector was creating jobs and growing but in the past few months things have changed significantly.

The economy is flat lining, confidence is being shattered and the result is fewer firms willing to take on workers.

Only just over year ago the plans set out by the coalition to reduce the deficit by cutting back the state have come unstuck purely because there hasnít been enough growth.

Back then most of the economists around the world were expecting 2011 to be the year of the recovery. They also thought that the UK would benefit from a weak Pound by expanding its manufacturing and services sectors and export more goods to the continent, its biggest trading partner.

Those economists didnít bank on the fallout of the Eurozone and the corresponding effect on growth so we are now staring down the barrel of a possible double dip.

If the Eurozone continues to implode with bank liquidity drying up, the life blood of a growing economy, then the picture for the economy and jobs remains bleak.

The UK is one of the most global of the global economies; as we saw only recently a fall in orders from one of BAE Systemsí biggest customers, the US, has led to thousands of jobs losses across the nation.

Another giant US corporation, Pfizer, announced the closure of their UK research centre in Kent some months ago. These are just two examples of how reliant we are on global businesses, as well as our own organic companies.

There arenít many possible answers to really tackle the amount of joblessness, as weíve seen in the US which has been suffering from a high rate of unemployment for years now. However, those measures that can be implemented need to be implemented quickly in order to make it easier for firms to train and employ people.

As mentioned, the FTSE 100 seems to have taken the worsening UK employment data in its stride this morning and the stock market index currently seems happy around the 5400 level.

As yet, the index hasnít pulled back as weíve seen in the past and, if it can maintain these highs, we might see a test of the resistance, however thatís all dependent on the European elephant in the room.

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'FTSE 100 Shrugs Off Weakening UK Unemployment Figures to Test Resistance' edited by DB, updated 13-Oct-11

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