UK Unemployment at 17-Year High; Logica Plunged 15%

Arthi Gupta
14 Dec, 2011
New York City

The UK indexes declined after unemployment increased to a 17-year high in the three months to October. Thomas Cook fell 3% after reporting an annual pre-tax loss. Wm Morrison planned to create more than 7,000 new jobs in 2012 and Logica plc plans to restructure and eliminate 1,300 jobs.

[R]2:00 PM London – The UK indexes declined after unemployment increased to a 17-year high in the three months to October. Thomas Cook fell 3% after reporting an annual pre-tax loss. Wm Morrison planned to create more than 7,000 new jobs in 2012 and Logica plc plans to restructure and eliminate 1,300 jobs.[/R]

The UK indexes declined after sentiment in European turned cautious after German economic outlook weakened and the euro zone production growth fell more than estimated.

Also, investors were jittery after the U.S. Federal Reserve did not announce new stimulus measures and left key lending rate at historic low for three years and near zero.

In London, FTSE 100 Index dropped 51.81 or 0.9% to 5,438.45 and the pound edged higher to $1.5640.

UK Unemployment Rises

The UK claimant count rose by 3,000 in November from a month ago, the Office for National Statistics said today. The claimant count totaled 1.60 million, up 138,600 from the prior year. However, the number of people on jobless benefits remained unchanged at 5% in November.

During the three months to October, the unemployment rate as measured by international labor standards was at 8.3%, the highest since 1996, the Office for National Statistics said on Wednesday. The rate was higher by 0.4 percentage points from the three months to July.

The number of unemployed increased 128,000 on the quarter to reach 2.64 million, highest since the three months to September 1994, the ONS said.

Gainers & Losers

Betfair Group Plc fell 2.6% to 792 pence after the online betting and gaming operator reported first-half revenues declined 10% to £191.3 million from £213.3 million in the same period last year. Profit before tax for the period surged 182% to £20.85 million from £7.45 million in the previous year.

Expansys plc plunged 8% to 1.50 pence after the online consumer electronics retailer reported first-half profit before tax of £785,000 compared to last year''s pre-tax loss of £39,000.

Logica Plc slumped 14.6% to 63.25 pence after the business and technology services firm said it is accelerating its restructuring and that may eliminate 1,300 jobs and will take a restructuring charges of about £80 million in full year, attached to restructuring of jobs and £13 million related to property.

Thomas Cook Group Plc fell 3.3% to 14.33 pence after the travel operator reported fiscal year 2011 revenue increased 10% to £9.81 billion compared with £8.89 billion.

The company reported a pre-tax loss of £398.2 million compared to a pre-tax profit of £41.7 million last year. The latest results included exceptional charges of £573 million largely due to impairments and write-downs.

Wm Morrison Supermarkets PLC gained 0.8% to 318.70 pence after the food retailer said will create more than 7,000 new jobs in 2012.