Every quarter, Insight East produces a Quarterly Economic Brief which seeks to give a broader view of national and regional economic trends than is possible in our other publications. We have just released our QEB for Q3 2009. It shows that the current official unemployment rate in the region – 6.7 per cent (about 190,000 people) - has changed little over the last quarter, although the rate and numbers affected are the highest for thirteen years. The East of England rate still compares favourably with the national figure of 8.1 per cent.

Other key findings

The UK economy is in its longest recession since records began in 1955, having shrunk by nearly 6 per cent since the first quarter of 2008. However, it is likely that we have reached the bottom of the cycle and that output will start growing again in the next quarter. While many businesses are still operating below capacity, business confidence is now much more positive than before. There remain questions about the underlying strength and depth of the recovery so far, however - particularly in manufacturing where a number of temporary stimuli are at play. One reason for the relatively modest increases in unemployment we have seen is probably employees’ flexibility on hours and wages. The flip side is that as the economy recovers, unemployment may take some time to fall. There is evidence that businesses are finding it more difficult to access capital, that business investment is still falling, and that there remain continuing skills shortages in some areas. All of these could have negative consequences for the economy longer term. House prices have been recovering since reaching a trough in April 2009, and have done so at a slightly faster rate in the East of England than nationally.

Contact Andrew Jamieson InsightEast@eeda.org.uk