London - Britain's new government faced mixed economic signals on Wednesday, as official data showed unemployment at a seven-year low while the Bank of England slashed its annual growth forecasts.
Both updates came as the EU said that Britain had failed to meet budget deficit targets and would have to remain under Brussels oversight for another two years to make sure it does.
In a boost for Britain's Conservative Prime Minister David Cameron -- who won last week's general election on his economic record -- the number of unemployed dipped 35,000 to 1.83 million people during the first quarter, the lowest level since 2008.
That took the unemployment rate for January-March to 5.5 percent -- the second lowest in the European Union after Germany, and compared with 5.6 percent for the three months to February.
However, there was economic gloom from the Bank of England (BoE), which tore up its forecasts for annual GDP growth for the next three years.
The central bank now expects the economy to grow by 2.5 percent this year, down from a forecast of 2.9 percent issued three months ago.
It also trimmed its growth forecast for next year from 2.9 percent to 2.6 percent, and for 2017 from 2.7 percent to 2.4 percent.
Additionally, the revised predictions did not take into account the impact of any further austerity measures from Cameron's new government.
"Governor Mark Carney stressed that the new forecasts do not take into consideration the result of the election and the impact it will have on fiscal plans, which raises great doubts over the reliability of the... Forecasts," said analyst Craig Erlam at trading firm Oanda.
"Especially when the EU referendum -- a result of the election outcome -- is likely to weigh further on investment in the coming years."
AFP
