U.K. Unemployment Will Take Time to Fall: Hayes

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Sept. 12 (Bloomberg) -- Simon Hayes, Chief UK Economist at Barclays Capital, discusses British economic data and his subsequent economic outlook. He speaks on Bloomberg Television’s “On The Move.” (Source: Bloomberg)

Bank of england.

You are looking for improvements in the unemployment picture in the united kingdom.

That is right.

We expected the unemployment rate to fall and yesterday's release.

That does not change the view that it is expected to fall very slowly from your.

-- here.

We will hit a seven percent threshold.

Why do you have less optimistic views of the united kingdom economy?

Do you think it will take that long for the unemployment picture to resolve?

This is about u.k. producti vity.

It is something in an expert ordinary way.

-- extraordinary way.

We've seen and protected fall -- a protracted fall in productivity.

We expect the economy to grow quickly without need to employ more workers.

Even though the economy is recovering, we do not think it will translate into improvements.

Do you think this is a preoccupation of the governor of the bank of england?

We heard him reset -- reference the past poor performance and productivity.

-- in productivity.

We'll hear from him justifying for guidance -- forward guidance.

It is the key focus and message.

This is forwarded guidance -- forward guidance.

Employment starts to erode the capacity.

There's another issue here with the united kingdom.

Growth prospects.

You need to see an improvement in productivity.

Our international competitiveness needs to see an improvement in productivity, as well.

That is the key macro-economic issue at the moment.

Once you've upgraded your expectations for the united kingdom's economy.

What are the key drivers?

Well, i do not begin is a secret that economists under forecast when and economy will take hold.

We've seen that right now.

We are seeing improvements in the high-tech and frequency cases.

-- hi frequency cases.

Something close to one percent.

That has been a surprise in the short-term.

How persistent is that and how should you read it?

It is still the case that we have a balance sheet and growth that is still below -- low.

There is good reason to think that rapid growth is not something that we should expect for quite a long time.

Simon, i know that you believe, or you say that credit flows, remain moribund in the united kingdom.

I think it is interesting.

We've seen sharp improvements.

The number of mortgage approvals, as well.

Would not seen that in mortgage lending -- we have not seen that in mortgage lending and it may be a matter of time.

We expect to see improvements over the next few months.

The housing market has been pretty stagnant.

Also, the outlook for consumer incomes is weak.

There is no guarantee that there is stronger activity.

And that this will feed into strong lending.

Simon, thank you very much for joining us today.

The chief economist at barclays capital.

The manager of black rocks $10 million mining funds.

His outlook on gold.

This text has been automatically generated. It may not be 100% accurate.


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