IMF: Britain’s unemployment lower than expected

New unemployment figures are out today. But research from the IMF shows that Britain's unemployment rate has been kept lower than economic models anticipated.

As new unemployment figures are released today, again showing a mixed picture, new research from the IMF shows that Britain’s unemployment rate during the “Great Recession” has been kept lower than economic models anticipated.

The IMF’s World Economic Outlook, released on Friday, details what has contributed to the changes in unemployment during the recession. According to the paper, economic theory predicted that unemployment in the UK should have risen by around 3.5 per cent. In reality, it was far lower at 2.5 per cent.

The chart shows that only Germany, Sweden and Finland had unemployment come in this far below the expected level. By contrast, Ireland experienced unemployment that was far higher than expected.

Another chart (Figure 3.9) attempts to detail why Britain’s unemployment came in below expected. It highlights that an “unexplained component”, partly due to Government policy, pulled down unemployment by 2 per cent while the UK’s reliance on the financial sector and, to a lesser extent, the housing bubble, pulled it in the opposite direction. The unexplained component is worth 600,000 to 700,000 jobs.

The IMF report says:

Unemployment dynamics in Canada and the United Kingdom remain difficult to explain: these countries have sizable negative unexplained components but did not implement large short-time work programs. For the United Kingdom, pay moderation may help explain part of this puzzle.

The Government’s policy response to the economic crisis including the creation of the Future Jobs Fund may also contribute to the lower than expected unemployment. The Conservative party opposed this approach while many right-wing figures praised Ireland’s policy decisions which appear to have raised unemployment.

Graeme Cooke’s monthly analysis of today’s unemployment figures will appear later today.

20 Responses to “IMF: Britain’s unemployment lower than expected”

  1. Small Green Bear

    RT @leftfootfwd: IMF: Britain's unemployment lower than expected http://bit.ly/9UFirq

  2. Malcolm Evison

    IMF: Britain's unemployment lower than expected | Left Foot Forward http://bit.ly/9azifb

  3. kay

    RT @samknight: RT @leftfootfwd: IMF: Britain's unemployment lower than expected http://bit.ly/9UFirq

  4. Stephen Bond

    RT @leftfootfwd IMF: Britain's unemployment lower than expected http://bit.ly/9UFirq

  5. Phelim Brady

    RT @bencooper86: RT @leftfootfwd: IMF: Britain's unemployment lower than expected http://bit.ly/9UFirq < May can FUCK OFF!

  6. Johanna Baxter

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  7. Ben Cooper

    RT @leftfootfwd: IMF: Britain's unemployment lower than expected http://bit.ly/9UFirq < May can FUCK OFF!

  8. Sam Knight

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  9. Sam Knight

    RT @leftfootfwd: IMF: Britain's unemployment lower than expected http://bit.ly/9UFirq

  10. Malcolm Evison

    IMF: Britain's unemployment lower than expected | Left Foot Forward http://bit.ly/9azifb

  11. Andy Sutherland

    RT @leftfootfwd: IMF: Britain's unemployment lower than expected http://bit.ly/9UFirq

  12. Billy Blofeld

    Goebbels himself would have appreciated the lengths you have gone to in order to try and deflect the bad news today for Labour, that unemployment has risen by 43,000 to 2.5 million.

  13. James Plunkett

    RT @leftfootfwd IMF: Britain's unemployment lower than expected http://bit.ly/9UFirq

  14. Drop in short-term unemployed as JSA count falls | Left Foot Forward

    […] in unemployment and what has actually happened, compared with a set of leading developed countries, reported by Left Foot Forward earlier […]

  15. K Knight

    IMF: Britain's unemployment lower than expected | Left Foot Forward: New unemployment figures are out today. But r… http://bit.ly/asDEgS

  16. Wayne Strnad

    IMF: Britain's unemployment lower than expected | Left Foot Forward http://bit.ly/bqVpSo

  17. Sara Ryan

    IMF: Britain's unemployment lower than expected | Left Foot Forward http://bit.ly/aHnDE8

  18. Leah Anderson

    the unemployment rate today is a bit higher because of the recession but hopefully the economy would recover soon.`.”

  19. Harvey Morris

    the unemployment rate on our country is growing bigger and bigger due to government mismanagement”:;

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