Bank of England (BoE) governor Mark Carney’s new unemployment mandate will face its first test on Wednesday, when the U.K. will release unemployment numbers for July.
Carney announced last week that the central bank will target low unemployment as well as low inflation from now on, with interest rates to remain at record lows until unemployment falls to 7 percent or lower. This new dual mandate means the next jobs number — due on Wednesday at 9.30 a.m. London time – will take on an “unprecedented” level of significance, according to Philip Rush, an economist at Nomura.
Robert Wood, chief U.K. economist at Berenberg Bank, told CNBC that every minor change in monthly unemployment numbers will now cause a ripple of speculation about whether the BoE will hit its threshold early or late.
“It is certainly now much more important than it used to be,” Wood told CNBC. “If it bounces down to 7.7 percent on Wednesday, or up to 7.9 percent, I don’t think it’s realistically a big deal, although it may not be interpreted that way.”
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