Unemployment Continues to Fall

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The UK unemployment rate in the second quarter of 2012 was 8.0%, down from 8.2% the previous quarter, according to official figures released today.  Although preliminary figures suggested another reduction in unemployment was likely, this comes after news last month that GDP had fallen to a new low.  It is unclear how long unemployment can continue to drop while the economy is shrinking.

Out of the three professors who gave their predictions at last year's Clash of the Titans event, Professor Muellbauer from Oxford was once again closest with his prediction of 8.3%, and has increased his lead over Professor Pesaran from Cambridge (who predicted 8.6%).  Professor Quah, who correctly predicted that the UK economy would falter in 2012, was unfortunately much too pessimistic on unemployment, forecasting a rate of 11%.

The low unemployment rate also surprised most of our individual contestants.  The average prediction was 8.9%, with only 22 out of 216 entrants predicting a rate of 8% or lower.  The other 189 forecasts ranged between 8.1% and 12%, with 9% being the most popular prediction (forecasted by 27 people). Back in December 2011, most people clearly thought that unemployment would be a bigger problem than it has turned out to be. This has had a big effect on the individual rankings, with most of the previous top ten replaced.  However, our competition leader, Siva Sabaratnam, continues to dominate the competition.

The next important date in the Clash of the Titans competition is the 24th August, when the second estimate for Q2 GDP is released.  A significant change, while unexpected, could upset the rankings (and might help explain the unemployment numbers).

Tickets for the next Clash of the Titans event, to be held on the 4th December, are now available here.