Business and Finance

LONDON–British unemployment jumped by its biggest amount in 16 years in August, factory orders fell at their sharpest rate in more than two years this month, and the country’s biggest mortgage lender might soon be taken over.

Bad news on the British economy flowed thick and fast yesterday.

Many experts say recession is now inevitable, with hundreds of thousands more likely to lose their jobs as a year-old global credit crunch tightens its grip.

Minutes of a Bank of England policymakers’ meeting this month shows one, David Blanchflower, wanted to cut interest rates by 50 basis points even though inflation was more than double the central bank’s target, so worried was he about the economic outlook.

The rest, however, voted to keep rates steady at 5 per cent for a fifth month because the pound’s sharp fall risked keeping inflation – already at more than twice the Bank’s 2 per cent target – high for longer.

The number of Britons claiming unemployment benefit rose by 32,500 in August, the biggest jump since 1992 and far more than the 22,300 predicted by analysts http://payday-badcredit.com. The International Labour Organization’s measure of joblessness rose by 81,000 in the three months to July, taking the total to 1.724 million, the highest in nearly a decade.

A year after Northern Rock bank became Britain’s most high-profile credit-crunch victim, shares in HBOS, the U.K.’s biggest mortgage lender, have been pummelled on concerns it may fall short of funds.

It is now in talks with Lloyds TSB bank to create a £28 billion ($54.5 billion Canadian) mortgage giant, a source said yesterday, amid speculation the government is helping facilitate the deal.

Reuters News Agency

Source