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Spanish jobless rate hits record high

Spanish jobless rate hits record high

Spanish unemployment rose to a record in the final quarter of 2012 as Prime Minister Mariano Rajoy’s government imposed the deepest budget cuts in the country’s democratic history. The Bank of Spain said separately that the nation’s recession worsened in the fourth quarter due to budget cuts. The central government and the regions started implementing Rajoy’s fifth package of austerity measures in a year, including higher sales tax and cuts in unemployment benefits, public sector jobs and wages.

On the other hand, it is expected that  Britain will be the strongest performing major economy in Europe for the next two years despite managing only sluggish growth, the International Monetary Fund said last night. But figures could show the economy contracted again in the final three months of the year – leaving the country on the brink of an unprecedented triple-dip recession. The IMF said the Euro zone is expected to suffer another year of contraction in 2013, with output sinking in 2014. Germany, France, Italy and Spain – the four biggest economies in the single currency bloc – are all expected to be weaker than Britain.

The revised IMF report was more optimistic about the U.S. economy, forecast to grow by 2% for 2013. But prospects could change depending on impending tax and spending decisions. The U.S. government faces a series of budget negotiations as it tries to navigate mandated spending cuts and a dispute between President Barack Obama and lawmakers over the country’s borrowing authority.

The BoE Minutes from the most recent MPC meeting revealed that the Committee voted unanimously in favour of keeping the interest rate at 0.5%. However David Miles argued that an easing of monetary policy, in part by discouraging any further appreciation of sterling, could help the rebalancing process and avoid potentially lasting destruction of productive capacity. In other UK related commentary, the number of Britons claiming unemployment benefit posted a surprise fall in December to the lowest since mid-2011. The surge into safe-haven assets in the closing stages of the session saw the pair give back most of earlier gains to settle little changed. In terms of technical levels, supports are seen at 1.5804 which is the 21DMA lower Bollinger level, 1.5778 and then at 1.5771. On the other hand, resistance levels are seen at the 200DMA line at 1.5907 and then at the 10DMA line at 1.5978.

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