UK ILO Unemployment beat expectations, coming in at 7.6% vs expectations of 7.7%. The number of unemployed people in the UK fell 48,000 to 4.27million. The Bank of England’s forward guidance; focused upon a headline unemployment rate of 7%. Today’s figure is a positive step towards this level, which potentially will see an increase in interest rates in the not too distant future.
However one potential concern highlighted by analysts is the relatively stable hourly earnings figures, which has been underlined as a concern of “underemployment”.
On Wednesday traders were surprised by fall in the rate of inflation to 2.2% in October, from Septembers 2.7%. The Office for National Statistics said the fall was driven by the biggest drop in transport prices since July 2009.
The lower than expected level of inflation, led to a weaker sterling in the FX markets, as traders believe this reduced the pressure on Mark Carney to bring forward a raise in interest rates. Todays better than expected job figures, have given sterling a bid, as it shows a strengthening economy.
GBPUSD following the release: