UK Jobless Claims Increase; Consumer Sentiment Surges

Arthi Gupta
15 Jun, 2011
New York City

The UK indexes slid after weak economic data from the U.S. and European leaders struggle to chalk out second bailout for Greece. The UK jobless claims increased more than estimated and consumer confidence surged to its highest level in May.

[R]3:45 PM London – The UK indexes slid after weak economic data from the U.S. and European leaders struggle to chalk out second bailout for Greece. The UK jobless claims increased more than estimated and consumer confidence surged to its highest level in May.[/R]

UK indexes traded lower after weak commodities prices and general weakness in European trading. European leaders failed to agree on the second bailout for Greece and a rating agency lowered its view on French banks citing Greek debt exposure.

In London, FTSE 100 Index declined 41.51 or 0.7% to 5,761.68 and the pound edged lower to $1.6266.

UK Jobless Claims Rise

The UK jobless claims increased more than estimated in May, data from the Office for National Statistics showed today.

The number of people claiming Jobseeker''s Allowance rose by 19,600 to 1.49 million in May, after logging a 16,900 rise in April. The claimant count rate was 4.6%.

The unemployment rate was 7.7% of the economically active population during three months to April, down 0.3 percentage points from three months to January.

The total number of unemployed people declined 88,000 in the quarter to 2.43 million. This was the largest quarterly fall in unemployment since the three months to August 2000.

UK Consumer Confidence Soars

The consumer confidence index soared in May, a monthly survey from Nationwide showed on Wednesday.

Nationwide Building Society said that its consumer confidence index for the UK jumped to 55 in May from the revised reading of 44 in April.

The spending index jumped 16 points to a score of 79, while the present situation index rose from 20 to 23, Nationwide said.

Gainers & Losers

Aviva Plc fell 1.87% to 424.10 pence after the insurance services provider said it appointed John McFarlane as non-executive director, effective September 6.

The Game Group plc plunged 11.05% to 40.25 pence after the video games retailer estimated fiscal year 2011 sales to be flat or down 3% annually.

J Sainsbury plc dropped 0.5% to 325.10 pence after the food retailer said first quarter sales grew 7.3% and like-for-like sales rose 4.8% helped by the Royal Wedding, Easter, and favorable weather in April together with fuel price inflation.

Lonrho Plc surged 3.95% to 19.75 pence after the producer of platinum group metals completed a share purchase agreement to acquire a 51% equity interest in seafood wholesaler Fish On Line (Pty) Ltd.

Serco Group plc edged lower 0.4% to 574.50 pence after the government services company signed a five-year contract to provide court security and custodial services to the Western Australian Department of Corrective Services.

The contract has a value of around A$210 million or about £140 million, with two options to extend to a maximum term of 10 years.