UK unemployment on the rise

Headlines, reading that 4,000 UK jobs were lost yesterday, have produced a raft of new estimates as to where the total number of unemployed will get to before this recession ends.

The consensus is that we will see a total in excess of 2 million imminently but from there it is anyone's guess. If anything, it makes the employment and earnings data, scheduled to be released at 9.30am today, even more relevant than the release of the BoE Quarterly Inflation Report at 10.30am.

That's not to say that the latter won't be watched with great interest but you have to feel that the content will have been anticipated and flogged to death in the press already. Unless there is something within the report that is totally out of synch with previous comment, one must assume the composition will be of concern on growth, rapidly falling inflationary pressures and worries of an undershooting of the inflation target in 12-18 months.

The unemployment numbers are expected to show an increase in people out of work of 35,000 giving a rate of 2.9% but I would not be surprised to see a higher figure of 40,000+ and 3%.

Really, it is difficult to see what sort of figures/statement can help Sterling in the immediate term with markets likely to view anything positive as a blip in the continued descent into the mire.

There are of course other things afoot around the globe following the near Global-wide Bank holiday for Armistice / Veteran's day yesterday.

Oil remains in the headlines with the recession led lack of demand keeping downward pressure on crude prices (WTI below $60 pb again to a 21-month low)) and talk of an additional emergency OPEC meeting, to try and cut production again, ahead of the scheduled mid-December get together in Algeria.

With the continued fall in demand it is difficult to see what OPEC can do. Keep their collective fingers crossed that there is a hard Winter, weather-wise, in the West and especially the US?

Following today's UK data, attention will shift to a raft of statistics coming from the Eurozone and its participant nations. Yesterday's German ZEW data gave a mixed message but by and large the current assessment still stinks.

Today we see Industrial Production estimates for September which are expected flat on the month with the danger on the downside.

Tomorrow the ECB will publish its monthly report for November which is likely to just put in print Trichet's prepared remarks at last week's post-Council press conference but on Friday we will see the preliminary estimates for 3rd Qtr GDP. This data is critical for the Eurozone. If, as seems almost certain, GDP turns out to have contracted again, then neither the ECB or anyone else will be able to argue against the fact that Eurozone is in recession.

This in turn will increase the likelihood that the ECB will cut rates regularly for the next 6-months until market rates reach the level with core inflation of about 1.75%.

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