Forex News – UK unemployment rate held at 7.2%, jobless claims drop
March 19, 2014 12:30 pm
The number of people claiming unemployment benefits in the United Kingdom fell in February by much more than expected. According to data from the Office of National Statistics, the claimant count change was down by 34,600 last month, more than the 25,000 decrease that was forecast, bringing the number of jobless Britons to 1.17 million in February. The number of people who are in employment hit a new record of just under 30.2 million, with the surge in self-employment acting as a catalyst to the rise in employed people.
The number of claimants was also down from January. The previous number of Britons claiming unemployment benefits fell by 27,600 and the number has been revised to show a larger drop in claimants by 33,900 in January, which is also positive news.
Meanwhile, the ILO unemployment rate for the three months to January 2014 came in at 7.2% as widely expected and unchanged from the previous rate.
Weekly average earning were also stronger, up 1.4% in the three months to January from an upwardly revised 1.2% previously (from 1.1%).
Until last month, the Bank of England used the unemployment rate as a measure for making interest rate decisions. However, as the unemployment rate fell sharply towards the 7% threshold that was set for considering interest rate hikes, the Bank removed this measure from its forward guidance policy. The BoE may now look at slack in the UK economy in order to see how strong enough it is to cope with higher interest rates.
A separate report was released at the same time as the unemployment data today. The Bank of England released its MPC minutes of the last policy meeting. The minutes revealed a unanimous no change decision to maintain rates at 0.50% and the Bank’s asset purchase program (QE) at 375 billion pounds, which was widely expected.
The minutes made reference to the strength of the pound and its risk to the UK growth outlook. Growth without generating inflation is also a concern to the BoE. Deputy governor Charlie Bean said last week that the central bank could keep interest rates lower for longer if sterling strengthens much more but added that its current level was “fine”.
Sterling encountered some volatility against the dollar after the jobs data but generally strengthened in reaction to the upbeat numbers, trading in the mid-1.66 range.
The number of people claiming unemployment benefits in the United Kingdom fell in February by much more than expected. According to data from the Office of National Statistics, the claimant count change was down by 34,600 last month, more than the 25,000 decrease that was forecast, bringing the number of jobless Britons to 1.17 million in February. The number of people who are in employment hit a new record of just under 30.2 million, with the surge in self-employment acting as a catalyst to the rise in employed people.
The number of claimants was also down from January. The previous number of Britons claiming unemployment benefits fell by 27,600 and the number has been revised to show a larger drop in claimants by 33,900 in January, which is also positive news.
Meanwhile, the ILO unemployment rate for the three months to January 2014 came in at 7.2% as widely expected and unchanged from the previous rate.
Weekly average earning were also stronger, up 1.4% in the three months to January from an upwardly revised 1.2% previously (from 1.1%).
Until last month, the Bank of England used the unemployment rate as a measure for making interest rate decisions. However, as the unemployment rate fell sharply towards the 7% threshold that was set for considering interest rate hikes, the Bank removed this measure from its forward guidance policy. The BoE may now look at slack in the UK economy in order to see how strong enough it is to cope with higher interest rates.
A separate report was released at the same time as the unemployment data today. The Bank of England released its MPC minutes of the last policy meeting. The minutes revealed a unanimous no change decision to maintain rates at 0.50% and the Bank’s asset purchase program (QE) at 375 billion pounds, which was widely expected.
The minutes made reference to the strength of the pound and its risk to the UK growth outlook. Growth without generating inflation is also a concern to the BoE. Deputy governor Charlie Bean said last week that the central bank could keep interest rates lower for longer if sterling strengthens much more but added that its current level was “fine”.
Sterling encountered some volatility against the dollar after the jobs data but generally strengthened in reaction to the upbeat numbers, trading in the mid-1.66 range.
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