Getting a job nowadays is by no means easy, particularly for those just out of university.
With firms struggling to see any bright prospects ahead they are reluctant to take on new staff. Those firms that are looking to expand, which are certainly in the minority, are more often than not looking for specialised staff or those with specific experience, which in turn is side lining the graduates who can be more of a risk to take on as they need training up to do the job. This is the crunch factor and during such delicate times it is not a risk that employers are willing to take.
The outlook doesn’t look any better either with the Bank of England, as expected, cutting their growth forecasts and highlighting that with the continuing turmoil on the continent there’s little to suggest there’ll be any surprises to the upside. With business confidence heading south there’s not going to be many willing employers out there for sometime until confidence returns and at the moment that stems primarily from the eurozone, our biggest trading partner.
This means that things could very possibly get worse before they get any better. Job losses are hitting the City the hardest with banks trimming their workforces aggressively. HSBC, Lloyds and Bank of America are getting rid of between 10 and 15 percent of their workforce. That’s a vast amount of people and is on top of job cuts from the past few years as well.
As expected we saw the usual claims from opposition politicians that it’s all down to the government cuts, which once again shows how politicians will do anything to grab a headline and a vote. The government cuts are not as deep as they could or maybe even ought to be and for all those unfortunate young people without a job you can’t expect the government to turn around and say, hey, no problem come and work for the state – we’ll just borrow another few billion to push our ever deteriorating deficit to even more unsustainable levels. There’s no easy answer, but this government can certainly do more to make it easier to employ people and get the economy moving again, but as mentioned, we need our friends across the Channel to pick up too. We wait with abated breath to see what our young Chancellor has to say in his autumn statement at the end of this month.
The FTSE continues to hover around 5500 but just below it this morning. Gains continue to remain hard to come by for the index and the lack of direction is worrying. The year-end rally has certainly not kicked off yet, if it comes at all this year, but the only thing that will do it will be a clear solution to containing the sovereign debt crisis.
The poor unemployment figures and Mervyn King’s Inflation Report didn’t bode well for the pound yesterday. However, this morning FX traders are moving out of the safe haven dollar, on the back of speculation that Fed Reserve Bank of New York President will give a speech today, saying that quantitative easing could very well be back on the cards. So, the pound has been given a bit of a boost this morning and is trading up marginally against the dollar at 1.5742. The pair has support at 1.5680 and resistance at 1.5825.
Fighting against the strengthening dollar, gold found it hard to make ground yesterday. Not only this but the US Labour Department’s report that there was a 0.1 percent decline in consumer prices against September’s figure accentuated the fact that gold was a needless hedge against inflation, thus reducing the demand for the yellow metal. There was an interesting media report in yesterday’s session though, Jon Paulson, one of the larger holders of gold ETF’s has just dumped a third of his stack, worth around 2 billion dollars. So by the close of business, the precious metal had slumped 17 dollars to 1763.3, which at time of writing is pretty much flat at 1764.7.
The announcement that the Seaway pipeline will be reversed brought great optimism to the energy sector yesterday as investors piled into crude, as its thought that congestion formed at the Cushing, Oklahoma hub, will now be eased. So for the first time in several months, the gap between the WTI and Brent contracts moved down into single digits. Currently Brent on the January future trades at 111.78.
This comment is from Capital Spreads.
We do not endorse the information and analysis available in this comment and it is provided purely for information purposes only and is delivered as a personal view by the writer. Under no circumstances is the information in this comment to be used or considered as an offer to sell, or a solicitation of any offer to buy. While all reasonable care has been taken to ensure that the information contained herein is not untrue or misleading at the time of publication, we make no representation as to its accuracy or completeness and it should not be relied upon as such. The investments referred to herein may not be suitable investments for all persons accessing this page. You should carefully consider whether all or any of these are suitable investments for you and if in any doubt consult an independent adviser. We accept no liability whatsoever for any direct or consequential loss arising from use of the information on this web page. Please see our Terms and Conditions.
