UK Unemployment Falls Below BoE Threshold

April 16, 2014 Share Print 0

U.K. unemployment fell to 2.4 million between December and February to reach 6.9 percent, hitting a new five-year low, as pay growth and inflation grew by the same level for the first time in almost four years.

The unemployment rate’s figure of 6.9 percent is significant as it is not just down by 0.3 percent from the previous three months to January, but it is also below the 7 percent level originally set by Bank of England (BoE) Governor Mark Carney last summer as the point when an interest rate hike would be considered. Carney has since abandoned that target, but the jobless figures remain closely watched.

The Office of National Statistics (ONS) also said that for the first time since April 2010 the pay growth rate did not fall behind the inflation rate.

Read MoreUK inflation dips again, lowest since October 2009

Total pay growth rose to 1.7 percent in the three months to February while consumer prices rose by the same amount. Consumer prices did drop down to 1.6 percent year-on-year in March, their lowest point in four years, but the ONS figures on wage growth did not take into account the month of March.

However, in the month of February alone, pay growth stood at 1.9 percent.

via CNBC

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.