The pound tumbled against the single currency yesterday after it was confirmed that UK unemployment had jumped by the largest margin on record and to a 12 year high, pointing towards a deepening recession. Economists are now expecting that unemployment may rise above the 3 million mark in 2010 as the UK’s economy continues to slow. The IMF also revised its economic outlook for many industrialised nations yesterday, with Japan and the UK facing negative growth in 2010 as well as this year. The eurozone is expected to remain fairly stagnant but crucially, and in contrast to the UK, it is not expected to contract next year.
The Bank of England also released their minutes yesterday, and it is expected that in addition to the £75bn that has already been created, the central bank will have to print more money to stave off an even deeper recession going forward. The decisions to cut interest rates by 0.5% and print more money were unanimous by the MPC.
The Confederation of British Industry release their industrial trends survey this morning, whilst there are no significant releases due from the eurozone today.
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